News - Bill's Blog

The infrastructure pandemic pension bailout

August 6, 2021

Money is fungible. 

Federal government grants to state and local governments may be targeted for specific purposes, but once that money arrives, it frees up money for other purposes.

The massive federal dollars arriving in the form of pandemic “relief” and soon-to-arrive “infrastructure” spending will similarly help to free up sources of funding for massively underfunded public sector pensions in state and local governments.

Some critics of the federal infrastructure proposals have focused on how the definition of “infrastructure” has been broadened to include social programs on top of traditional brick-and-mortar spending on roads, bridges etc.

But the broadening need not be explicit, for example, in including child care in a definition of infrastructure. When the federal government provides states and cities more dollars for infrastructure projects, it helps to free up funding for other uses, including pensions.

Meanwhile, government grows and grows. So does the federal debt.

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