12.20.2008

QUIT SPENDING MY MONEY

On the heels of President Bush's $13.4 billion loan to GM and Chrysler, I read this post at Greg Mankiw's blog, in which he notes that a recent AP story lists him as the only outside economist contacted by the Obama team who is skeptical of the need for fiscal stimulus. Obama's team didn't contact me, of course, but I would also have to side with Mankiw: this is a rare case in which you can actually just print more money, tax cuts may have more juice than government expenditures, and amping up public spending can be a hard habit to break.

Importantly, Discovering Urbanism also wisely points out that in the rush to spend money as fast as possible, we may be locking ourselves into current patterns of infrastructure investment, thus moving us further from long-term sustainability rather than closer. So, leaving aside whether all of this fiscal stimulus is needed or not, and what the long-term consequences are for our national balance sheet, haste can literally lead to waste. It'll be one thing to tell my kids they're on the hook for their per capita share of a really big spending bill; it'll be much harder to look in their eyes and tell them we spent it on bridges to nowhere and sprawl-inducing highways.
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