Tags: Greene | government | 1 trillion | infrastructure

Jeff Greene: Govt Should Spend $1 Trillion on Infrastructure to Fight Inequality

By    |   Wednesday, 29 April 2015 08:20 AM

Former Treasury Secretary Larry Summers and other economic luminaries have called for an increase in infrastructure spending to pull the economy out of the muck.

But it's unclear they would go as far as billionaire real estate mogul Jeff Greene would. He says the government should spend $1 trillion on infrastructure to fight growing income inequality.

"The global equalization of wages and the exponential growth in technology has created a job-killing machine that's only going to get worse," he told the Milken Institute Global Conference, CNBC reports.

Greene, who made much of his money betting against subprime mortgages during the 2008 financial crisis, says raising taxes on the wealthy and investing in education and training would help curb inequality.

But with interest rates close to record lows, the government would do better to take on another $1 trillion in debt to improve infrastructure.

"If we added an extra $1 trillion to national debt, we could rebuild these underground pipes and schools and hospitals and give hope to people," he said. "That would get the country through this difficult period. And it would help make the U.S. more competitive again."

But what about our already stretched debt burden — $18 trillion for the federal government, compared with GDP of $17 trillion?

"Sure $1 trillion is a lot, but it's not a lot relative to the total debt," said Greene, a major property owner in West Palm Beach, Fla., including the Strand Apartments on the Intracoastal Waterway.

As for Summers, he has several ideas on how we should go about improving the infrastructure.

"First, the focus of infrastructure discussions in both the public and the private sector needs to shift from major new projects whose initiation and completion can be the occasion for grand celebration to more prosaic issues of upkeep, maintenance and project implementation," Summers writes in the Financial Times.

For example, repair of existing rail line and stations ought to be considered before embarking on high-speed railway systems.

"Second, accountants in the public and private sector need to develop methodologies for capturing deferred maintenance and showing this in the financial accounts for what it is — borrowing from the future," Summers notes.

"Third, the public and the media on their behalf need to be much less accepting of institutional failure," he adds.
 

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Economy
Former Treasury Secretary Larry Summers and other economic luminaries have called for an increase in infrastructure spending to pull the economy out of the muck.
Greene, government, 1 trillion, infrastructure
381
2015-20-29
Wednesday, 29 April 2015 08:20 AM
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