Friday, January 23, 2009

Man OMannababwe

Fixing "our crumbling infrastructure" has become a new plan for creating jobs. But, before the government can spend $1 billion hiring road builders and purchasing asphalt, it must first tax or borrow $1 billion from other sectors of the economy, which then lose a similar number of jobs.

In other words, highway spending merely transfers jobs and income from one part of the economy to another. As economist Ronald Utt has explained, "The only way that $1 billion of new highway spending can create 47,576 new jobs is if the $1 billion appears out of nowhere as if it were manna from heaven."

Actually, you can have $1B appear as manna from nowhere if the Fed "prints" it.

Quickly followed by hyper-inflationary collapse...