Obama was out pushing his infrastructure improvement program recently, theoretically trying to create jobs and jumpstart the fractious economy. The benefit of such programs is questionable though. Granted, there is a great need for repairs to our bridges, highways and rail systems, but does running up huge deficits (read future tax hikes) for these kinds of projects do anything to stimulate the economy?
There are two ways the government can implement the funding of these “shovel-ready projects.” They can collect taxes from you and then pay once the project is finished, or they can order the project to commence and borrow the money to pay for it. With our credit crazy system that does not require a balanced budget, you know what they do. These government funded projects provide a temporary benefit, but at what great price? Shifting money from one pocket to another doesn’t make one any richer, and neither does collecting taxes only to give the money back. Granted the infrastructure improvement projects are needed and getting something back for our tax dollar is better than just handing out a welfare check, but don’t be fooled by the claims that government make-work will stimulate the economy. Continue reading