Trump and Clinton agree on this single issue, and it could be a boon to the economy

NEWSFLASH: There is one single issue where Trump and Clinton completely agree, and it makes tons of sense and could be a massive boon to the economy.

Any idea what that could possibly be?

It’s a massive build-out of our roads, bridges and airports—aka, infrastructure.

Why do Hillary and Donald see eye-to-eye here? Well, as former Treasury Secretary Larry Summers has asked rhetorically: “Are you proud of New York’s John F. Kennedy Airport?

So, there’s that. Lousy, crumbling, unsafe, overcrowded, inefficient transportation infrastructure. And there’s another reason: jobs. Thousands and thousands of them that would be created building all this out. And then the real goal beyond that, the stimulating effect on the economy that all those jobs and new bridges, airports and roads would have.

“With interest rates so low, the government could borrow massive amounts of money by issuing hundred-year bonds to pay for these projects,” says Peter Borish, who was a founding partner at hedge fund giant Tudor Investment Corp and is currently chief strategist for the Quad Group.

The idea of infrastructure spending is so spot-on that the candidates have been topping each other with dollar amounts in their proposals. In fact, Trump is the one who’s called for the biggest spend—over $500 billion so far, “twice as much” as Clinton’s, he says—and I say “so far” because his aides say he’ll release a plan shortly.

Hillary Clinton’s proposal calls for an estimated spend of $275 billion over the next half decade. This plan would establish a “national infrastructure bank” to support big projects. This is similar to an idea put forth by President Barack Obama that failed due a lack of support by Republicans.

A Bloomberg story notes, “U.S. spending is projected to fall about $1.4 trillion short of the $3.3 trillion needed through 2025 for airports, highways and other infrastructure, according to the American Society of Civil Engineers.”

So why does the GOP oppose infrastructure? Republicans often say that these programs are the stuff of pork barrel and another example of wasteful government spending. Infrastructure projects are also closely tied to taxation, which immediately raises political hackles. And then there is geography. A large portion of these big-spend projects would be designated in blue states, which isn’t popular with GOP leaders who hail mostly from red states. (Republicans didn’t always oppose this kind of spending. Remember it was Eisenhower who created the interstate highway system.)

Meanwhile other countries are plowing ahead. China has averaged spending 8.2% of its GDP on roads, trains and bridges over the past 20 years, according to McKinsey—including $650 billion in 2009 alone. (This while the US has averaged 2.5% over the same period.) A Credit Suisse report notes that “Canadian Prime Minister Justin Trudeau recently introduced a C$60bn [$46.6] infrastructure plan, while “Theresa May, the new UK PM, has called for ‘more treasury backed project bonds for new infrastructure projects.” In the UK too, both parties are calling for more money to build out and rebuild ports, airports and roads.

As anyone stuck in a traffic jam, overcrowded airport or stalled train anywhere in the world this summer can attest, you could make the argument that infrastructure spending is money very well spent.


Andy Serwer is editor-in-chief at Yahoo Finance.

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