Monday, February 02, 2009

Wise Words from Andrew Samwick

"Second, as I will continue to blog until I am blue in the fingers, the appropriate course of action when the economic downturn appears like it will be unusually severe is to bring planned capital projects forward in time.  Doing so allows them to be done more cheaply.  That politicians cannot make sensible policies under the pressure to be timely is obvious.  But the warning signs (and the idiotic mantra of temporary, targeted, and timely) have been evident for over a year.  Had we started to accelerate capital projects then, we would be seeing those projects kick in by now, and we would be on our way out of this mess.  Instead, we are repeating this year -- on a grander scale and with a leftward tilt -- the lunacy of last year's stimulus package."

It is amazing to me that we are having this discussion at the moment. This is another failure on the part of the Bush Administration, and specifically of Mary Peter's tenure as DOT secretary.  Recessions, whether they be long in character like this one or shorter in nature, do occur.  When recessions occur labor and materials are typically cheaper and it is a good time for the government to forge ahead on infrastructure projects it has in the pipeline.  During recessions the government can pursue planned infrastructure investments at a lower cost, accomplishing two objectives simultaneously: 1) using the taxpayers' money efficiently in implementing necessary infrastructure projects; 2) providing stimulus.  All of this is incumbent on planning which appears to have been nonexistent.

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