Why wasteful spending is good…

And there should have been more of it, according to Jon Chait at TNR:

The stimulus bill is based on Keynesian theory, which I’ll briefly explain in the condescending manner we liberals so enjoy using. When we’re in a severe recession, good productive capacity goes to waste. Autoworkers sit home unemployed because nobody has money to buy cars, and cooks sit home unemployed because nobody has money to go out to dinner. The first thing for government to try is to reduce interest rates, to encourage businesses to borrow money to hire more workers and buy equipment. But, if interest rates hit bottom, then the government has to shock the system back to life by spending money directly. Say, Washington hires construction workers to build something, and those workers start buying cars and going to restaurants, and, after a while, the economy is running again.

Delicious, stimulative pork

Delicious, stimulative pork

 

The articles goes on to point out why Republican opposition to the stimulus (and specific provisions within) is completely dumb. There is little need to be persnickety about what’s in the stimulus, whether it is “pork” or not, or whether it is an “efficient” use of the government’s money:

The point of stimulus spending, by contrast, is simply to spend money–on something useful if possible, wasteful if necessary…World War II was an effective stimulus that, economically speaking, consisted of 100 percent waste. If war hadn’t broken out, we could have enjoyed the same economic benefit by building all those tanks and planes and dumping them into the ocean.

h/t Yglesias.

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