Pied Piper Donald Trump

Since Donald Trump won the November 8 election, some of his proposals have gotten more attention. One such proposal is about the country's infrastructure -- highways, bridges, airports, water and sewer systems, etc. One can find several articles/comments about this proposal by searching Google News. Even though Democrats believe there is a need for improving infrastructure, they don't like Trump's proposal. 

One such article is in the Wall Street Journal here. Online subscribers can read the whole article at the link. Others who want to do so will need to find another way, e.g. a library. The ones I have seen have very little detail about his plan. An exception is this document written by two Trump advisers about a month ago. 

Trump’s infrastructure plan strikes me as another half-baked idea from the pied piper Donald Trump. In my view it has a big enough hole to drive an Abrams tank through it. Whence the revenues for the hypothetical private investor (PI)?

Said document says, “For infrastructure construction to be financeable privately, it needs a revenue stream from which to pay operating costs, the interest and principal on the debt, and the dividends on the equity.” Again, whence the revenues for the hypothetical PI? The article offers no answer I can see. 

The article assumes that for every $1,000 of an infrastructure project the PI will make an equity investment of $167 and it will borrow $833. If borrowed at 4.5% for 20 years like the article says, the debt service will be $37.5 each year for interest plus $833 in 20 years.  In addition there are all the construction costs for labor and materials, which I will assume is $1,000 to keep it simple. So aggregate cost, simply speaking, is $1,000 + 20*$37.5 + $833 = $2,583. 

The only “revenue” in the proposal for PI is the 82% tax credit, which amounts to a mere $137 (=0.82*$167).  But this could be realized only if PI has taxes due as the result of other operations. Regarded as an isolated business, the revenue would be $0! That’s unless Trump plans for more handouts to crony capitalists.

I leave it to those under the spell of the pied piper, or anybody else, to tell me whence the revenues in excess of $2,583 to cover the $2,583 of costs identified above plus whatever the target profit is. (A 9% dividend on the $167 equity implies a target profit of $300, i.e, 0.09*$167*20.) How much of that revenue comes from the US Treasury in the pied piper's plan? Does he plan to siphon off gasoline and diesel tax revenues, toll revenues, heavy vehicle use fees that truckers pay, etc. that the federal and state governments receive now and have for decades? Are there going to be lots of new tolls on many roads and bridges that have none now and those go to PI?

The idiom "PI in the sky" seems fitting. 😊