In an interview, investor Jim Chanos said the reason why Trump's plan won't work is because Trump wants public-private partnerships for infrastructure projects, but that will only work for some small projects, not for the major projects the United States needs.
Chanos explained according to CNBC:
"Because private investors need high rates of return, these deals generally haven't been good deals for anybody. ... We're told that the private sector will be able to do this better. Well, they might be able to do it better and faster, but only for a small number of projects."
Chanos added:
"Real projects that we need — repairing, refurbishing, whatever — are tougher. You're not going to get private investors to sign up for those without definable cash flows. It's something that sounds good but when we actually start looking at projects that make sense for private investors leveraged up with state-backed or federally-backed bonds to do a project, we're going to find that it winnows down the list dramatically."
In other words, private companies will not invest in large infrastructure projects because the only way they can make a profit is with US Treasury bonds, which don't pay that much and not that fast. That would mean private companies would not want to risk investing in large infrastructure projects if they know the profit will be small.
Or to put it another way, Trump sold the American public the idea that the private sector can do things better. But in the case of public infrastructure, the private sector doesn't have a real incentive to do the projects. Thus, Trump may end up with a bunch of infrastructure projects that will not be done because nobody will want to do them.
The White House, as usual, did not comment on Chano's evaluation of Trump's infrastructure plan.
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