Friday, February 13, 2009

Stimulus Watch and Government Waste

Here's an interesting site to look at: Stimulus Watch. It lists projects that the United States Conference of Mayors classified as "shovel-ready." According to the mayors, these projects could be funded immediately using resources from the fiscal stimulus bill. Notice that the projects are not part of the stimulus bill. They're however strong candidates for funding, since they're at the top of mayors' wish lists.

Browsing the list, it becomes clear that a good part of the projects are petty undertakings or wasteful administrative derelicts that during normal times would most certainly not pass through the filters of sensible project analysis or the scrutiny of public opinion.

This is exactly the problem with the fiscal stimulus framework that has being put in place by the federal government. It's being done as if anything goes and everything has to be done fast, and it shows a disturbing lack of recognition of the role of economic incentives and of private and social costs.

Even under the optimistic assumption that the stimulus package will produce a short-term economic jolt (and there's absolutely no guarantee that this will indeed happen), the permanent waste of real resources that could otherwise be used for more productive enterprises may end up imposing a significant sacrifice on the economic well-being of an entire generation.

No comments: