Skip to content

Why China Is Running Circles Around America

February 26, 2018

By Ellen Brown : truthdig – excerpt

One Belt, One Road,” China’s $1 trillion infrastructure initiative, is a massive undertaking involving highways, pipelines, transmission lines, ports, power stations, fiber optics and railroads connecting China to Central Asia, Europe and Africa. According to Dan Slane, a former adviser in President Trump’s transition team, “It is the largest infrastructure project initiated by one nation in the history of the world and is designed to enable China to become the dominant economic power in the world.” In a Jan. 29 article titled “Trump’s Plan a Recipe for Failure, Former Infrastructure Advisor Says,” he added, “If we don’t get our act together very soon, we should all be brushing up on our Mandarin.”

On Feb. 12, Trump’s own infrastructure initiative was finally unveiled. Perhaps intending to trump China’s $1 trillion megaproject, the administration has now upped the ante from $1 trillion to $1.5 trillion, or at least that’s how the initiative is billed. But as Donald Cohen observes in The American Prospect, it’s really only $200 billion, the sole sum that is to come from federal funding. And it’s not even that after factoring in the billions in tax cuts in infrastructure-related projects. The rest of the $1.5 trillion is to come from cities, states and private investors, and because city and state coffers are depleted, that chiefly means private investors. The focus of the administration’s plan is on public-private partnerships, which, as Slane notes, are not suitable for many of the most critical infrastructure projects, because they lack the sort of ongoing funding stream—such as a toll or fee—that would attract private investors. Public-private partnerships also drive up costs, compared with financing through municipal bonds.

In any case, as Naked Capitalism blogger Yves Smith observes, private equity firms are not much interested in public assets, and to the extent that they are, they are more interested in privatizing existing infrastructure than in funding the new development that is at the heart of the president’s plan. Moreover, local officials and businessmen are now leery of privatization deals. They know that the price of quick cash is to be bled dry with user charges and profit guarantees… (more)

This pretty well sums up the problems we are having and explains one theory on how the US banking system may be putting us at a disadvantage.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: