My Thoughts on the Stimulus

February 6, 2009

It’s a good idea for government to step up spending, but it matters what they buy. We have just learned that sinking a lot of the nation’s effort into building unoccupied houses does not make a good long-term strategy. Eisenhower invested in an interstate system which facilitated commerce.

These sorts of projects should get top priority, if anyone is smart enough to figure out what they are.

There must exist some measure that would rank the merit of various investments. Is $100 million invested in a movie the same in the short- and long-run as $100 million invested in a non-redundant bridge that connects large population centers? One would think not.

What no one is talking about is that a lot of the stimulus is simply handing out money to people. It may or may not be a good strategy, but no one’s talking about it.

It also matters when we buy it. At first blush it doesn’t make sense for the bill to commit funds in 2011. On the other hand you don’t finish the Hoover Dam in a year. So, some amount of delayed spending is required if investing in infrastructure is a component.

We just need to hear a coherent story, and while “I won” is a coherent argument, it is not convincing, particularly since this type of bill was not what he campaigned on.

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