That is Anthony DiNozzo I think. Or no, no, Cochrane. Yeah that's it. He's not saying what he thinks, in the excerpt. He's just embellishing a story with attitude:
We're about a trillion dollars below trend, so the government needs to borrow an additional $750 billion a year (I'm usuing the Keynesian 1.5 multiplier) and blow it on whatever is handy; Solyndras, high speed rail, windmills, any old rathole will do so long as it's "spent." (Sorry, I'm not doing a very good job of expounding this position. Not my job.)
For comparison, Paul Krugman, repeating the same story with objectivity:
This is the kind of environment in which Keynes’s hypothetical policy of burying currency in coalmines and letting the private sector dig it up – or my version, which involves faking a threat from nonexistent space aliens – becomes a good thing; spending is good, and while productive spending is best, unproductive spending is still better than nothing.
Krugman has it exactly right. The other guy is being a jerk.
I think Krugman is right but I'm not a big fan of selling capital projects as stimulus. Neither the time frame nor the distribution of any given capital project necessarily aligns with counter-cyclical needs. It plays right into the criticisms of stimulus being inefficient and/or ineffective.
ReplyDeleteYes, it's better than nothing but better still: conduct capital projects as needed on their merits mostly independent of the cycle; conduct counter-cyclical fiscal policy in a timely and direct fashion with taxes and transfers that don't directly consume real resources.