A Reality Check for Private Investment Plans

The Trump administration has set an ambitious goal of increasing investment in public infrastructure by $1 trillion over the next decade. Administration officials and some congressional leaders have emphasized a desire to achieve this by promoting “private investment” rather than relying on public funding. “For every $1 of federal dollars, there’s $40 of private-sector spending. We want to leverage as much private-sector dollars as possible to maximize the fixing of our infrastructure,” said Speaker Paul Ryan in during an interview with Charlie Rose on January 18, 2017.

Bryan Grote of Mercator Advisors took an in-depth look at the past performance of transportation public-private partnerships to show that the 40 to 1 ratio cited by Speaker Ryan includes all sorts of non-federal spending and debt financing and is a misleading indicator of the “private spending” potential.  Mr. Grote’s January 2017 article for Public Works Financing offers a reality check for those who maintain that private investment is the primary (if not entire) solution for achieving the President’s infrastructure plan.

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