Biden’s infrastructure plan is intended to revitalize the U.S. economy through infrastructure development. The Biden administration has high hopes for this and has repeatedly told the American public that this is a “once-in-a-century opportunity. It is interesting to say that the United States, as the strongest “Infrastructure Madness” generation in the world in the 20th century, is now launching the “Great Leap Forward in Infrastructure” plan to China. –This is the result of the second generation of “Infrastructure Madness”. A careful examination will reveal that this politically motivated plan is not only detached from the actual needs of the United States, but also from the existing conditions of the United States, and even if the Biden administration forces it through, I’m afraid it will be a tuition payment.
The Chinese elements of Biden’s “Great Leap Forward in Infrastructure” plan
The Chinese elements of the plan can be seen everywhere. The plan’s goal is to “compete with China,” and the details will certainly be branded with traces of this package everywhere.
Biden’s March 30 speech in Pittsburgh, intended to sell his $5 trillion American Jobs Initiative and American Family Plan, was premised on “competition with China” as the reason he gave and the goals he would achieve, saying that these spending plans are critical to America’s winning future because Xi Jinping Xi Jinping is “very eager for China to become the most important and influential power in the world,” and reinventing the economy is a necessary step for the United States to survive in a long-term competition with China, a race in which the United States must prove not only that democracy can work, but also that it can continue to lead the world’s most successful authoritarian state in innovation and production. authoritarian state, and tied his ambitious domestic agenda to plans to restore U.S. influence abroad. on April 9, the Biden administration’s Transportation Secretary Buttigi Berger emphasized at a press conference that “after decades of underinvestment, we have fallen to 13th place in the world in infrastructure,” “I think Americans should always have the best, and I think that’s the tone that President (Biden) has set.”
But Ian Bremmer, chairman of the Eurasia Group, said bluntly in an interview with VOA (April 30) that Biden mentioned China only because it is “useful in American domestic politics. I am not politely suggesting that it is not the real goal of Biden and the Democratic Party to reinvent the U.S. economy through infrastructure in order to enhance U.S. global competitiveness, because in the age of high technology, it is a distant goal to abandon technology in favor of infrastructure to enhance competitiveness, but the real goal of Biden and the Democratic Party is to strengthen government control over social resources through the slogan of competing with China to complete the transition from big society to big government.
The U.S. Infrastructure Plan is a Clumsy Reproduction of China’s Infrastructure
Biden’s plan, which I call the “Great Leap Forward,” completely discards the advanced experience created when the United States was a global powerhouse with its superb infrastructure strength, and is a rather clumsy copy of China’s 2009 quadrillion dollar bailout.
The Biden plan to China’s scowl, the first big bad trick is to use huge amounts of government funds to diffuse into infrastructure construction. The United States was the world’s first generation of deserved “infrastructure mania”, until the 1970s due to the saturation of domestic infrastructure, the domestic pursuit of scientific and technological innovation, only gradually from the infrastructure hegemony on the throne. This hegemony is certainly not given for nothing, only in infrastructure investment is better than the major European countries in the government input strategy. Back then, the United States encouraged “public-private partnerships” to leverage private sector capital and increase infrastructure investment. For example, the basic strategy for the costly U.S. railroad construction was to raise private capital for construction by private equity companies with government support and assistance, of which the formation of railroad companies to issue stocks and bonds was a very effective way to raise capital. Data show that 85% of the investment in railroad construction in the United States is private investment, of which 3/4 of the investment in the United States is including the investment of large investment banks and numerous small-scale personal investment. Among the individual investments, some invest in national railroads to receive dividends and bonuses, while more local residents want to support local construction.
The Biden model is a step backwards compared to the original American model of raising infrastructure funds. China’s Deng Xiaoping’s reform and opening up was successful because of the willingness to change the planned economy model and open a doorway for the individual economy and private capital, which led to the China of today. At that time, in the economic field, Deng’s greatest emancipation was when he reflected on why the planned economies of the Soviet Union and Mao China had failed, and realized the truth that the private economy would always be more efficient than the public, and that public assets would always be more prone to waste and depletion than private ones. U.S. business operators certainly understand this, and as those running for the Democratic presidential nomination in 2019 talk with the radical AOC about high taxes on wealthy Americans, Dell founder Michael Dell was asked at the World Economic Forum’s annual meeting on Jan. 23 whether he supports U.S. Rep. Alexandria Ocasio-Cortez, D-N.Y., who has proposed a “70 percent tax rate on wealthy people earning more than $10 million a year,” Dell replied that he “would prefer to allocate a lot of resources through his own foundation rather than give the money to the government. to the government”. He added, “No, I don’t support this proposal, and I don’t think it will help the U.S. economy.” His explanation was that government is costly and inefficient, and the economic elite in attendance understood this.
What makes the U.S. strong is that it maintains a free competitive capitalist economic model based on constitutional government. Biden’s plan to reinvent the U.S. economy is a foolish attempt to learn from the government-regulated economy of China, which has been hoping to catch up with the U.S. It is a foolish attempt to learn from the backwardness of the advanced.
The shortcomings of Biden’s Great Leap Forward
When Biden’s team drew up the three plans, which totaled more than $6 trillion, it was obvious that they only saw the strengths of the U.S. world empire: the hegemony of the U.S. dollar in the world monetary system after World War II, and the fact that the U.S. dollar is known as “paper gold” due to the fact that the world economic settlement system all uses the U.S. dollar, and the U.S. central bank is, to some extent, the central bank of all countries in the world. The central bank of the world. Because of this position, the U.S. can afford to print more money and issue more debt than China, but it is inevitable that inflationary pressures will be released to the outside world – in contrast to China, where the internationalization of the RMB has just begun and the inflationary pressures caused by excessive money printing can only be absorbed at home.
The shortcoming of Biden’s infrastructure plan is that it ignores China’s strengths as a second-generation infrastructure fiend: from the perspective of the various materials needed for infrastructure, China has a cost advantage in terms of the upstream and downstream industries that form a dragon package for infrastructure; from the perspective of labor costs, China has the world’s most hard-working, low-paid migrant workers – both of which are shortcomings of the United States.
In terms of infrastructure materials, infrastructure is a very long industry chain, with at least fifty upstream and downstream industries. When the United States was the “infrastructure maniac”, these industries in the United States into the dragon supporting, now half a century later, many industries in the United States has long disappeared, to re-establish these industries need to take time. If purchased by other countries, in all aspects of construction materials, engineering equipment, auxiliary facilities do not have the same cost advantage as China.
In terms of labor costs, this happens to be the most expensive cost of all industries in the United States, especially construction workers who need to do the dirty work of the post, the wage bill and insurance expenses are more expensive. Biden this infrastructure project that requires thousands of workers, labor costs will be an astronomical figure. What’s more, many of the investments in Biden’s infrastructure plan also include provisions to give workers high pay and labor protections. The plan also adds a legislative proposal to penalize employers who violate the National Labor Relations Act and make it easier for temporary workers to form unions – unions have always been institutions that increase hiring costs, and union members are salaried workers All expenses must be budgeted for.
The U.S. infrastructure industry is currently a sunset industry, China’s infrastructure industry is in the growth and maturity period, know how to control costs, these years the Chinese infrastructure team footprint almost all over the world, low cost is an important winning strategy. Regardless of how the Biden class think, the fact is this: the infrastructure industry is long, large volume, the United States from the 1970s since the development of high-tech and began to de-industrialization, the construction industry as a systemic industry, many upstream and downstream industries have declined; China through years of accumulation, the infrastructure industry has become an economy of scale.
Even in the private sector, U.S. infrastructure costs are far higher than China’s. If the federal government raises the majority, U.S. infrastructure will become the world’s first sky-high price, according to the law that public costs are consistently much higher than private costs. If you consider the cost, outsourcing to construction companies in other countries or hiring foreign labor, such as contracting to China, which has the strongest infrastructure strength, is tantamount to helping China, contrary to Biden’s plan to “compete with China” slogan; if you hire foreign labor, you will eventually become part of the immigrants.
The marginal benefits of U.S. infrastructure are far inferior to China’s
The U.S. and Chinese infrastructures started from completely different places. Prior to the 1990s, U.S. infrastructure was among the most advanced in the world, with both the highest rail mileage and the most developed air traffic in the world. Although it is currently ranked 13th in the world competitiveness ranking, it is not lagging behind, but it is just a bit inferior to the “world first” status that the U.S. has always had, and the U.S. is not happy about it.
This situation to engage in infrastructure development, only on the basis of the existing perfect, unlike China, in some backward areas is completely new, the marginal benefit of capital invested is not high. What’s more, the U.S. and China are different countries, the U.S. is a private country, even 50 meters below the ground belongs to the landowner, if it involves demolition, I’m afraid that the power of the Democratic Party government is not strong enough to the Chinese government as wantonly violate private property – until now, China’s forced demolition, land acquisition by the U.S. and other Western countries denounced as a serious violation of human rights.
To sum up, the U.S., with its technological and financial hegemony in the world, suddenly wants to follow China’s example and go back to the industrialization period, using infrastructure as a grip on the economy, in addition to completing the process of big government on the halfway point and strengthening government power, whether in the direction of development or the huge debt burden caused, or the difficulties in the process of implementation, is destined to end up with poor results, and is completely wrong. Therefore, in addition to the Biden administration and the interests of the chain of institutions and people, there are few applause.
Recent Comments