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Opinion
Joseph G. Carson

Markets Will Wish Infrastructure Was the Priority

The tax legislation will severely limit the federal government’s ability to fund a large and multiyear public spending plan.
A bridge too far.

A bridge too far.

Photographer: Jim Alcorn/Getty Images

President Donald Trump has hinted that the administration plans to release a detailed set of principles this month for “a trillion-dollar infrastructure bill” to upgrade roads, bridges, airports and other public works. Too bad the recently enacted tax cut legislation will increase the large projected fiscal deficits over the next decade and severely limit the federal government’s ability to fund a large and multiyear infrastructure plan.

In the parlance of financial markets, this is what’s known as a missed opportunity, and the current euphoria among investors over lower corporate taxes could soon fade. The economic lift from the tax plan will be positive, especially in the early part of 2018 as the cuts take effect. However, sustained growth in gross domestic product of greater than 3 percent needs all sectors of the economy to be growing, and that includes public investment.