The Clinton Plan’s Growth Deficit

Hillary’s agenda is long on economic platitudes. How is more money for roads—$50 billion a year—going to kick-start growth?

By John H. Cochrane in the WSJ.

"Larry Summers, Democratic economic adviser extraordinaire, wrote recently in the Washington Post that growth is “the single most important determinant of almost every aspect of economic performance,” and that trying to boost it “has been discredited in the minds of too many progressives.”"

"Her central pro-growth proposal is “infrastructure” spending, $275 billion over five years, financed in part by some sharply higher taxes."

"Nobody thinks that stagnant growth is centrally the fault of bad roads and bridges."

"Spend taxed or borrowed money on anything, and the “multiplier” will increase “demand.”"

"We’ve been at this since 2008. But the caution that stimulus should be “timely, targeted, and temporary” has now been forgotten. Japan’s massive “infrastructure” spending and weak growth to show for it are forgotten. And if U.S. growth hasn’t been kick-started by the trillions of stimulus so far—the government has accumulated $8 trillion of debt since the recession began—how will another $50 billion a year help?

Further, why are roads and bridges still a problem? President Obama has been after “infrastructure” stimulus since 2009. If you ask that question, and listen to answers, they are pretty clear. It’s nearly impossible to build infrastructure these days. Endless regulatory reviews and legal challenges bog down builders."

"If the Sierra Club sues to block her worthy commitment to “upgrade our dams and levees,” will she really short-circuit the legal process, and how?

The rest of Mrs. Clinton’s economic agenda is a thousand-course smorgasbord of government expansions, with the same deficiencies. A random sample: Higher taxes on capital gains and corporations. New taxes on financial transactions. A corporate exit tax. Paid leave. Free college. A higher minimum wage. More federal training programs."

"The “plan” offers neither a strategy for enactment, nor thought about why these are problems in the first place. Yes, it’s hard to find quality affordable childcare. Why? Could licensing, zoning, teachers unions, minimum wages, ObamaCare mandates, employee time rules, taxes, immigration restrictions and the like have something to do with it?"