NEW YORK (Reuters Breakingviews) - It’s what Donald Trump might call a “classy” problem: How to spend $21.6 billion. That’s the amount the U.S. Department of Homeland Security says the president’s promised wall on the border with Mexico will cost, according to an internal report seen by Reuters. Even without the overruns that would probably jack the price up, it’s a bad investment choice.
Trump’s wall – actually a mix of fences and walls – is more a political symbol than a practical barrier. The president and the U.S. Congress need to weigh the cost of the wall against other uses of the money – the opportunity cost, as businessmen like Trump sometimes say.
The commander-in-chief supports a stronger military. Some Manhattan real-estate style negotiations with Huntington Ingalls Industries might enable him to squeeze out two new aircraft carriers similar to the $13 billion USS Gerald R. Ford for the price of the wall.
In the energy sector, Trump wants to revive the U.S. coal industry. A 600 megawatt coal-fired power plant cost $2 billion a few years ago, according to Synapse Energy Economics. Scrap the wall, and Uncle Sam could build 10 of them, with cash left over to install clean technology.
Or there’s infrastructure. The president’s plan, created by investor Wilbur Ross and economist Peter Navarro, suggested leveraging $167 billion of equity to create $1 trillion of investment in roads, bridges, railroads and the like. Using similar borrowing assumptions, investing in these assets instead of the wall could mobilize $130 billion of funding in all.
It’s harder to see how to make a noticeable dent in the nearly $4 trillion annual federal budget. Yet scrapping the wall would free up enough to fund, for example, the Department of Labor for two years – or maybe for one year, with enough left over to buy Twitter, Trump’s favorite social medium.
Last but not least, there’s culture. The president’s affinity for the arts may not extend far beyond commissioning a self-portrait. But the federal government spends $150 million a year to assist the National Endowment for the Arts, which last year recommended more than 2,400 grants in nearly 16,000 communities covering every congressional district. While Trump has promised the wall will be “beautiful,” he could instead ensure the entire country can experience artistic beauty for the next 150 years.
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