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.