Public works projects help the economy in the long run only if they are needed.
For example the Hoover Dam helps provide water and electricity. It has paid for
itself economically many times over.As a negative example, if a
bridge is built to nowhere, and therefore doesn't get much use, this bridge
will not pay for itself economically.The key to making
infrastructure projects pay for themselves is to build there where they are
needed.What I have said is almost obvious I would think, but given
the fact that this article had to be written and judging from some of the
comments, apparently what I am saying here is news to some.
Just a couple of macro comments to Invisible hand. First of all your bias that
private capital is spent wisely vs. the unwise spending of government spending
tells me either you have never worked in private industry or at least
haven't paid attention. Private industry can simply cover up their
wasteful spending by passing the costs on or profits alone will cover the sins,
but private industry waste is every bit as prevelant as government waste. Secondly, your statement that government simply doesn't have the
expertise to be effective is very uninformed. The education and expertise in
the public sector is every bit as professional as that in the private sector.
It's simply when they make mistakes they are obvious to the whole world and
the consequences can't be hidden in an opaque bureaucracy. Point being, of course the public sector makes mistakes and is often
ineffective, but your castigation of them vs. the diafication of the private
sector is entirely unwarrented.
To "Eric Samuelsen" unfortunately reality has shown us that the Obama
administration is using "fuzzy math" to support their claims. So far if
you look at the claims of jobs being saved, the administration is claiming to
have saved jobs that were never going to be cut.If the stimulus is
actually doing what they claim, why won't the Obama administration let us
see how they calculate their numbers? Aren't they supposed to be the most
transparent administration ever?
All public works projects come from taxes, in one form or another. We, the
people, pay for those projects. It comes from our wages. It is added to the
price that we pay for essential products, like gasoline. Some of those projects
are truly essential. We need highways to get good from place of origin to our
markets. Some of those projects are not essential - like the "bridge to
nowhare".Congressmen are not capable of NOT taking money for
worthless projects. History shows us that Congressmen will take any funds for
any purpose if those funds can show that that Congressman will gain votes.We are charged a federal tax on gasoline. Who assures us that ALL of
that money goes to the construction and maintenance of federal highways? In
addition, we are charged a State tax on gasoline. Who assures us that ALL of
that money goes to the construction and maintenance of State roads?Public projects enable commerce to happen. Spending money on worthless
"public" projects is just "pork barrel" projects that need to be
@Samuelsen: "Sound Keynesian economics" is an oxymoron. Somebody has to
pay the bills eventually. It's always easier to make tomorrow's
taxpayer's do it. We've been playing that game for so long now that it
cannot be put off any longer. We will soon see how "sound" this economic
Excellent letter. As for Redshirt's concerns, what are you talking about?
The 2009 stimulus saved 2.4 million jobs. The New Deal saved our nation's
economy. Stimulative spending works. Nice to see the head of the Chamber of
Commerce embrace sound Keynesian economics.
Second, Congress must ensure that money invested in infrastructure is spent
wisely.That's the problem with public versus private spending.
Congress and federal beureaucrats don't the expertise or proper incentive
to direct the money to the most profitable use.
Well you could give a boost to the road and bridge constructionists by a big
public works promotion. Then where would the money come from? If it's
from current receipts of gasoline taxes all well and good, although we are using
the roads less as more are unemployed,less money is available for consumer
spendnig, and gasoline prices are increasing. We might actually
slow down construction for the moment and tackle the root economic problem -
government spending and government interference in the economy. The article
does appear to tackle this obviously which could be the beginning of a fruitful
To "Thomas J. Donohue" unfortunately the government has never figured
out how to do what you suggest. Hoover tried it in 1929 and 1930 and it failed
then, Obama claimed to have tried it again in 2009 and it failed again. Do you
really think that "the third time is the charm" and it will work?