A Word of Caution on that Stimulus Program

For an interesting view of the federal stimulus program, that challenges the government’s conventional wisdom, check out an interesting op-ed piece in the Washington Post. Chris Edwards, Infrastructure Projects to Fix the Economy? Don’t Bank on It, Washington Post, October 21, 2011.

Edwards’ point is that major federally-built or financed projects, notably but not exclusively dams, have been known to produce more harm than good, and on occasion have caused major catastrophes. No arguing with that. But since the effects of these projects can go either way, their construction should be preceded by careful weighning of their honestly projected cost and and equally honestly assessed benefits. But typically, they are presented as panaceas, particularly in bad economic times, so that their benefits are touted without sufficient consideration  given to the question of whether they are net benefits, and even if so, whether they will exact a high price — economic and human — that an informed society may find intolrable.

We recall how way back in 1966, a California Highway Commissioner confessed that the actual highway costs consistently exceeded the estimates by 32%, “most of the increment coming from additional right-of-way costs.” Joseph C. Houghteling, Confessions of a Highway Commissioner, Cry California, Spring 1966, 29, 30. There is reason to believe that things have not changed much since then, as suggested from the frequency of the “Lowball Watch” feature of this blog.

Call the cost-benefit debate the way you prefer, but this is still a good, thought-stimulating read — click here.

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