Why stimuli fail
How are government "stimulus" packages supposed to work? Jeff Perren points to an answer in the Wall Street Journal: "Government stimulus bills are based on the idea that feeding new money into the economy will increase demand..." But identifying where the government gets the money from explains why such stimulus doesn't work the way it's supposed to, if at all. Says Jeff:
I strongly urge everyone to read the entire article, which uses "infrastructure spending" as an example.
There should be no subject more topical for a NZ taxpayer.
Meanwhile, the Onion asks whether the government should stop dumping money down a giant hole [hat tip Berend].
UPDATE: Meanwhile, here's Lynne Kiesling on prospective attempts to build a better economy by mis-allocating (or destroying) capital. To paraphrase a popular recent ad campaign, "No We Can't." [Hat tips Art Carden and Will Wilkinson]