The so-called “CARES Act” is now under our belts, and some $2+ trillion will thus shortly fly out the government’s door, with no offsetting revenue. Some may quibble over whether it is really an appropriate function of government to try to protect everyone against all downside risks of life; or over whether the $2 trillion may be a crazily excessive amount brought about by irrationality in a moment of perceived emergency. (See, for example, Manhattan Contrarian coverage here.) But at least we now have a good handle on the gross amount of fiscal damage to the government from the current virus crisis. Right?

Actually, not at all. No sooner did the CARES Act hit the statute books than the talk in Washington immediately shifted to the next “stimulus” bill, with a price tag in the range of yet another $2 trillion. This time the buzz word is “infrastructure.” On Monday Speaker Nancy Pelosi proposed gigantic new spending initiatives, including on “infrastructure,” in something she referred to as “Phase 4” of the coronavirus response:

Pelosi on Monday said a “Phase 4” coronavirus stimulus package ought to include a bipartisan deal on infrastructure spending.

And did President Trump push back? Not that I can find. To the contrary, he issued the following tweet on Tuesday:

With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill. It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4

So far, I have seen no specification from Trump as to what projects he has in mind for his “very big & bold” infrastructure bill. But make no mistake — this is a perilous moment. Federal infrastructure spending — particularly in a context where vast amounts of money are allocated before deserving projects have even been identified — has almost unlimited potential for waste of resources and impoverishment of the people.

As you may recall, Trump and Hillary Clinton competed with each other during the 2016 campaign to see who could propose the bigger and more extravagant infrastructure spending program. Both threw out numbers in the range of $1 trillion. (A lousy trillion seems so puny today, doesn’t it?). I didn’t find any particular resistance to either candidate’s proposals at the time. After all, everybody knows that our infrastructure is “crumbling.” Who could be against infrastructure? I commented on the 2016 proposals in one post immediately after the election on November 19, 2016 titled “What Is With This Infrastructure Fetish?”, and again on December 30, 2017 in a second post titled “Not So Fast With That Trillion For Infrastructure.” Not that anyone actually expressed agreement with my position; but somehow in the frenzy of the Russia hysteria this one issue somehow mercifully fell by the wayside, at least temporarily. But i’ll remind you of this key quote from that second post:

Government dispensing the infinite pile of free money at these levels creates irresistible incentives for graft and corruption on a gargantuan scale. . . . What we're currently talking about is the government first deciding, with no specific projects in mind, that the trillion dollars is going to be spent; and then soliciting ideas from people who want to get in on the largesse.  The prospects that most of the money will be well spent are very slim.  

So what might be in today’s new multi-trillion dollar “infrastructure” initiative? There is an almost infinite collection of bad ideas angling to get in on the federal loot. Look, for example, at the items on the Democrats’ wish list that were proposed to go into the CARES Act but got excluded at the last minute as non-germane. How about tens of billions for wind turbines and solar panels? These produce almost no useful electricity, and have the potential to drive the consumer price of electricity up by a factor of five or ten or even more. From Master Resource today, commenting on prospects for this new “Phase 4” stimulus:

Expect Nancy Pelosi’s “Green New Deal” to be part of this effort given that the Senate and the President said NO to subsidies for solar panels and wind turbines in the CARES Act. 

Among other bad ideas from the Democrats that failed to make it into the CARES Act, who could forget emissions standards for airlines?

And the bad ideas aren’t coming exclusively from the left. At PJ Media, a guy named David Goldman, who blogs under the name of Spengler, advocates that it is now the government’s responsibility via this “infrastructure” spending bill to fund the development of 5G telecommunications technology in order to keep China from getting the jump on us:

We need to move strategically critical industries onshore, above all semiconductor fabrication. The U.S. now depends on foreign fabrication plants for most of its computer chips, and virtually all of its most sophisticated chips. . . . De-coupling from China should be an urgent priority where national security is concerned. A modern chip fab costs about $20 billion. Five such fabs should do it. So earmark $80-100 billion for that. 

Goldman is equally ready to make it the government’s job to fund the expansion of railroads and pipelines to ease recent capacity constraints:

What are the top priorities [for an infrastructure bill]? . . . Rail is . . . important. America's oil production surge strained our transport system, rail as well as pipelines, and drastically raised freight costs.

It’s like the world has completely forgotten how a private economy works. If rail and pipeline capacity is strained, and prices are up, doesn’t that provide the private capital to fund expansion, without need for taxpayer backing?

And this is only scratching the surface of the bad ideas out there. It almost makes you wish for the return of the Russia hysteria to distract everyone’s attention.