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Build new infrastructure and make foreigners pay for it.
I know what you are thinking, a Presidential nominee of a once serious political party has proposed to build a wall on the border with a foreign country, and "make them pay for it". This sounds absurd. It is. It won't happen.
Yet there is infrastructure we can have with no money down. We can get new infrastructure and "make" foreign countries pay for it.
I speak, of course of toll roads. Foreign countries, and private firms from foreign countries, have shown interest in building US infrastructure. Reason Foundation's Annual Privatization Report identifies 31 large highway concessions, 20 of which were funded by tolls. The vast majority had international financial participation, and the whole amount was worth over $38 Billion.
Really, what could be better? No need to raise domestic taxes. Someone else builds a road or rail line or airport terminal or port we want and have already approved. If we break off diplomatic relations with their home country, they can't roll up the infrastructure and take it home. If they go bankrupt (a not uncommon proposition), the facility stays and keeps operating. If we switch to flying cars, and their investment is stranded, they are on the hook for all the future losses. All we have to do is pay for the use of the public works while we use it, which we should be doing anyway.
The history of transport is very much the history of "foreign" investors building infrastructure "overseas" in developing countries. Just look at the history of US infrastructure financing in the 19th century, and you will see much international participation (e.g. the Erie Canal). The US has similarly developed infrastructure elsewhere in the developing world. If the rest of the world believes the expected rate of return in the US is higher than elsewhere, we should not disabuse them of that notion.
America has many dysfunctions, our collective inability to properly finance, price, and manage infrastructure is one I pay a lot of attention to. It's not going to get substantially better any time soon (the next decade or so). There are many reasons for this, which have been discussed on the blog before.
Neil Stephenson wrote nearly 25 years ago in Snow Crash:
When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y'know what? There's only four things we do better than anyone else: music movies microcode (software) high-speed pizza delivery
So if we can supply the world with software and pizza delivery (in the immortal words of Neil Stephenson), and they supply us with roads, the Law of Comparative Advantage suggests we are all better off.
All of which reminds me of the Simpson's episode Radioactive Man, in which a movie is made in Springfield, and the locals take Hollywood for all its worth:
Jiminy jillickers! - We're shutting down production.
- Yeah, well, we only have $1,000 left anyway.
Ah, there's a $1,000 "leaving town" tax.
I hope you're all satisfied. You bankrupted a bunch of naive movie folks. Folks from a Hollywood where values are different. They weren't thinking about the money. They just wanted to tell a story. A story about a radioactive man and you slick small-towners took 'em for all they were worth.
Should we give them some of their money back?