For the better part of six months we have been bombarded by arguments that we need to finance “shovel-ready projects.” The New Deal is often cited as an example; let’s put people who were recently building tract houses in the Inland Empire to work on road crews.
There are two flaws with this logic.
- It ties us to the same waste of resources that got us into this mess. We had way too much of our economy tied to construction (and finance, which may or may not be a different story). We need to transition to a new deployment of resources. Basic infrastructure made some sense in the 1930s as we tried to digest the wave of unskilled immigration we experienced in the 1920s, but it is hardly the most promising avenue for the future. Increasing the proportion of our economy in knowledge industries probably makes a bit more sense.
- The emphasis on readiness gets in the way of creativity. Whether projects begin today or a year from now is not a great concern, especially since the scale of government spending we are contemplating today is going to preclude us from doing it again in the near future. Measure twice when you can only cut once.
