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Public-Private Partnerships-- How Conservatives Shift The Tax Burden Away From The Rich



I was reading a Noah Smith essay on Pakistan this morning-- about how the corrupt political elites are holding the country back. The question he posed was why aren't Pakistan's leaders investing in the development of the country and instead letting it fall backwards. His description, though reminded me of why America's conservative elites are refusing to invest in America's future. "Growth," he wrote, "makes your people materially better off. It gives them food to fill their bellies, a roof over their heads, convenient transportation, sanitation and health care, leisure and entertainment, and so on. Surely Pakistan’s leaders care at least somewhat about the welfare of their people, no? Well, they probably do. But so far they’ve been able to satisfy Pakistanis’ basic consumption needs through means other than economic development. The average Pakistani household consumes as much as the average Indian household, and more than the average Bangladeshi household."

Pakistan is underinvesting in its future and borrowing irresponsibly, just the way the GOP is insisting the U.S. do. Like Republican parts of America, "Pakistan is behaving like a lot of natural resource exporters behave-- but without the natural resources. Instead of a middle-income or high-income consumption society, it’s a low-income consumption society-- keeping its people barely treading water, with lots of help from external largesse... Why would Pakistan consume today instead of investing for the future? I’m not sure, but my guess is that it has to do with the country’s political system."

Pakistan is politically unstable and instability discourages growth-oriented policy. "Growth creates new power centers-- newly rich businesspeople who are able to spend money influencing politics, as well as newly affluent middle classes who have different political wants and needs. Any regime that chooses growth will have to deal with the shifting sands of power that result from that growth. And if your sands already shift a lot, the added instability might be too scary."

Conservative elites in the U.S. have under-invested in infrastructure for far too long. How many bridges have to collapse to get the GOP to stop obstructing progress? How much pain and suffering among working families before they agree to tax the wealthy? How far does the Climate Crisis have to progress before it's just too late to do anything about it? This morning, writing about the conservative infrastructure proposal, Hill reporter Alexander Bolton noted that "some Republican senators are already raising concerns about what’s in the plan and whether the proposed funding sources in the framework will really cover the cost of spending priorities. Several GOP senators are questioning a provision that would provide $40 billion to beef up IRS enforcement, which is expected to generate an estimated $100 billion in new revenue that can be spent on infrastructure.

Overall, Senate Republicans say they’re getting conflicting advice within the party on the infrastructure deal.
Karl Rove, former President George W. Bush’s top strategist, recently told a group of GOP senators that it would be smart for them to support-- or at least not kill-- a bipartisan infrastructure bill because it would show voters that Republicans are willing to get things done when proposals are reasonable and have strong public support.
He argued it would give Republicans more credibility when they oppose some of Biden’s more controversial plans, such as injecting hundreds of billions of dollars in new spending to shift the United States to a green economy or dramatically expanding access to child care and expanding Medicare eligibility and coverage.
Rove reprised his argument in a Wall Street Journal op-ed Wednesday when he wrote: “Prudent bipartisanship gives Republicans greater credibility when they stand against other elements of the Biden agenda.”
But another highly respected Republican adviser, former Sen. Phil Gramm (Texas), recommended at a Senate Republican Steering Committee lunch that senators should keep their fingerprints off of Biden’s ambitious infrastructure spending proposals.
Gramm warned that Biden, with or without Republican support, is going to rack up a lot of federal debt at a time when economic indicators show inflation is already rising faster than expected. He told GOP lawmakers that it would be better if they were not part of a spending binge that could have unpredictable economic effects, according to Republican sources familiar with the meeting.
The uncertainty among Republicans over how to respond to the bipartisan infrastructure framework is reflected by Senate Minority Leader Mitch McConnell's cautious approach to it.
McConnell told colleagues at a Senate Republican lunch Thursday that he is “still learning about it,” according to a senator in the room.
Later on Thursday afternoon, McConnell sounded less inclined to embrace the deal after Biden threatened to veto it unless Congress simultaneously passes a much larger reconciliation package packed with Democratic spending priorities. That legislation would need only Democratic votes under special budget rules.
“It almost makes your head spin,” McConnell complained on the Senate floor. “An expression of bipartisanship and then an ultimatum on behalf of your left-wing base.”
“Really, caving completely in less than two hours, that’s not the way to show you’re serious about getting a bipartisan outcome,” he added.
McConnell later told Fox News’s Special Report about his shift in expectations after Biden’s insistence on a separate reconciliation bill.
...One topic of debate was the extent to which public-private partnerships would generate investment activity.
Sen. Mark Warner (D-VA), one of the principal negotiators, has suggested that an infusion of federal money could provide major returns in private investment, but other senators are skeptical.
...GOP senators are also concerned that they may get tied to the larger reconciliation package if they give Democratic moderates political cover by joining with them to pass the bipartisan infrastructure proposal.
Progressives are making clear they view the bipartisan framework and a multitrillion-dollar reconciliation package as part of the same deal.
“There are a lot of different ways we can do this, but the bottom line stays the same, it’s one deal,” said Sen. Elizabeth Warren (D-MA).

These "public-private partnerships" that conservatives like so much almost sound innocent; they're not. They're stalking horses for privatization (like toll roads and private utilities) that transfer financial burdens disproportionately onto the shoulders of the working class, while shielding the wealthy. Public-private partnerships are a way to circumvent progressive taxation, which is why conservatives (Republicans and fake Democrats like Mark Warner, the richest member of Congress) are pushing them as part of the infrastructure deal.



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