Systematic infrastructure underinvestment – a $2.6 trillion ‘gap’ – and accelerating climate change have become facts of life in the United States. Though typically attributed to politics, this Article posits the underlying cause as a market disequilibrium rooted in infrastructure’s unique economic dimensions, exacerbated by dual-federalism. The recently-passed Infrastructure Investment and Jobs Act, though well-intentioned, is insufficient to overcome these long-standing challenges.Based on a broad, global study of effective approaches to infrastructure finance, as well as a multi-disciplinary analysis of the economics, engineering and finance literature, this Article proposes addressing the U.S. infrastructure disequilibrium through asset recycling. Asset recycling is an innovative strategy, pioneered in Australia, premised on a two-phase process: (i) monetizing existing, government-owned infrastructure; and (ii) reinvesting the proceeds in new asset development. The new assets can then be ‘recycled’ again, creating a virtuous cycle on a debt-neutral basis for the government. The Article illustrates this approach through a detailed, empirical case study of the New York MTA, the nation’s largest transit agency. The MTA has over $50 billion of debt, COVID-19-related losses exceeding $20 billion and bond covenants, as well as state law, explicitly prohibiting bankruptcy. The analysis finds that monetizing solely the MTA’s bridge and tunnel assets (but not the subway) through a long-term concession could, conservatively, generate $33 to $53 billion – sufficient to repay the majority, if not entirety, of the MTA’s obligations, giving it the wherewithal to build the sustainable infrastructure that New York deserves.Beyond the mechanics and empirics, the underlying principles – leveraging private capital, coupled with robust oversight – have far broader implications, as asset recycling is estimated to represent a $1.1 trillion opportunity. The Article concludes with a discussion of normative and policy considerations, as well as areas for future research, including multi-stakeholder governance frameworks for imperfect public goods, ESG-based contractual mechanisms and the interplay between infrastructure policy and climate change, with an emphasis on broad-based social and allocative equity
