Obama: No Such Thing as 'Shovel-Ready' Projects
The President now says public works don't do a good job of stimulating the short-term economy. That's not news.
We wrote recently about how some states are lagging in getting federal stimulus dollars funneled into on-the-ground projects, meaning that President Obama's predictions about the stimulus' job-creation haven't materialized as quickly as he'd hoped.
Obama summed it up succinctly in the profile of him in Sunday's New York Times Magazine: "[T]here’s no such thing as shovel-ready projects."
He's right: Public works aren't the most effective short-term stimulus to the economy.
Economist Bruce Bartlett, blogging at Capital Gains and Games, makes really interesting point about why Obama's statement shouldn't come as a surprise to anyone. But, Bartlett says, that doesn't mean public works aren't vital in the economic long-term:
[I]t is surprising that the lack of shovel-ready projects or the slow pace of public works spending is a revelation to anyone. Obama’s statement is simply an admission of the obvious. [...] Their main value is that public goods stimulate long-term growth and the best time to produce them is when the private sector has a lot of idle resources and they can be financed at low interest rates. These are still very good reasons to undertake public works now before the economy recovers, interest rates rise and the private sector competes for the resources necessary for large public works projects.
Join the Discussion
After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.
In Final Push, U.S. Transportation Secretary Calls on Leaders to Rethink Their Mission2 hours ago
Moody's Settles With States for $863.7M Over Misleading Ratings36 minutes ago
GOP Vows to Defund Planned Parenthood. As States Learned, That's Hard.23 minutes ago
Airbnb's Tax Deal With Kansas May Be Model for Midwest3 hours ago
New Illinois Law Requires Schools to Test Water for Lead3 hours ago
Missouri's Days-Old Governor Cuts $146 Million From Budget3 hours ago