Public choice perspectives on the fiscal stimulus

If you want to worry less about the stimulus, try this argument.  Government will spend a certain amount of money in any case, but that spending can be of higher or lower quality.  Maybe you don't like the stimulus spending but is it possible that the spending alternatives would be even worse?  Lock Jason Furman and Larry Summers in a room for an hour, with no web connection and equipped only with a single crayon between them.  They still would come up with a better spending plan than would Congress and perhaps we are getting some version of what except they have more than a crayon.

Alternatively, perhaps progressives should be a little worried.  As Matt Yglesias admits, evidence on massive fiscal stimulus is iffy (through nobody's fault, it's simply hard to know).  But if you're a progressive, the opportunity cost of spending that money is a very non-iffy, highly-likely-to-succeed government program of some kind.  Call it public health infrastructure.  Maybe the content of the stimulus bill isn't as progressive as the alternatives.

If you're a libertarian, the government will just waste that money anyway.  Can it be that progressives should be more worried about the stimulus, in net terms, than libertarians?

The underlying fiscal model here is that Obama has more good ideas (good from a progressive point of view, at least) than he is allowed to spend money on but he will spend as much as he can.  These conclusions can be overturned to the extent that the prospect of a stimulus increases the total of what will be spent.

Addendum: Is Jeff Sachs agreeing with me?


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