Disclaimer: I didn't choose the channel. I hate Fox News. But I was on the treadmill in my hotel this morning and it was on. Regardless of the horribly disreputable source (then again, is there a reputable source these days on tv?), they were showing a list of projects that had been submitted by the city of Philadelphia for part of the stimulus money. The projects were arguably valuable:
* Needed investment in the city zoo
* Investment in the airport runway (I'm a big fan of safe runways)
* Replacement of city's light bulbs with more energy efficient bulbs
* Etc
The projects were in a table with three columns - project, investment needed, jobs created.
As I looked at each of these I was struck, not by the waste of money, but the assumption that this was truly job creation. So if we sign off on number three and hire 200 people to replace all the light bulbs in Philly, what do we do three months later when they're all replaced? The economy's stimulated, the jobs were created, but now we just lay them off, right? Becker and Murphy state this more eloquently than me, but it seems to me that any short-term stimulus package focused on immediate spending and hiring will rapidly turn into either massive layoffs or, even worse, long-term commitments to an increased government cost base, employed or unemployed but now with qualified unemployment benefits.
Can we just give every American $4,000 to go spend on a new big-screen and call it good?
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