"Make Work" has never worked too well, Japan has spend billions in the last ten years building roads that lead from "noplace to nowhere", they also built a huge bridge, if memory serves, to some thinly populated islands, which could not be justified on any economic grounds except "make work". Now we know that this experiment did not work, but created an additional embedded cost (maintenance and bureaucracy). Sure there might be places where infrastructure work is required, that is the "normal" duty of local and sometime federal governments (jusyt spend the some of the money accumulated in various funds for that purpose), but taking a chunk like an additional $100 B (above currently budgeted infrastructure projects) and trying t find ways to spend it will lead to waste. A better way to soak excesses (if they are still there this time next year), IMHO, is reduce by between .5% to 1% the "Payroll Taxes". This tax is the most regressive, and thus reducing it will immediately inject onto the demand side of the economy a good 70% of the reduction. It is equally "giving back" to both the employers and the employee a small but immediate relief. We had a similar discussion about the budget surplus at about this time last year (in connection with the elections), and my proposal then was to give a rebate of between $600 to $1000 to each tax payer, and make this "rebate" variable every year depending on the size of the projected surplus (the assumption was a surplus of about $160 B). We went half way with a rebate of $300 per tax payer.
Zeev |
