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When private capital for infrastructure gushes, where does it go?

Date Published: 01/06/2008

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Uresearchbldg Pavement In Minnesota as well as the rest of the nation, private capital is attracted to new buildings, not fixing old pavement.

As a greater proportion of the nation's wealth edges upward, supply siders assure us it will flow back down as job-producing private investment and public-service philanthropy.

Cutting taxes on the very top earners, the argument goes, is good for the economy. It frees dollars from inefficient government spending and the clutches of special interests, putting the money to work more productively to benefit all Americans.

But as the New York Times reports in a story contrasting approaches to infrastructure building in New Haven, Connecticut, the trickle of private and public spending seeks different streams. And when more funding gushes through private channels, investment in transportation, schools and other vital public assets shrivels.

In the case of New Haven, once the recipient of more federal dollars per person for urban renewal than any other city, private investment now far surpasses public outlays.

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The shift from public money to private wealth in shaping the nation

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