The bridge to nowhere really isn't the worse thing that government can do, it can manipulate markets to destroy more wealth so that even if the government activity was free of direct cost, it would still hurt the economy. But fine I'll continue with the "bridge to nowhere" example.
Even in a worst case 'bridge to nowhere' companies provide steel; engineers, architects and workers are employed. Commerce is 'created', which creates wealth.
And that steel (or the resources that went in to creating the steel, or getting the iron and other precursors of the steel) and labor would have gone in to something else.
You increase the demand for architects, engineers, construction workers etc, so you push the price for them up (perhaps in dollar terms, perhaps in the short run in terms of having to wait for them which is itself a price, and indirectly increases dollar cost).
In the longer run, if you build enough "bridges to nowhere" you might get new supply as people move in to these fields attracted by the new higher wages. OK, now maybe the price goes back down, but you still aren't getting a free lunch. If you have more people working as construction workers you have less labor available for other purposes. If you have more people working as architects and engineers you have less highly skilled and educated workers available for other purposes.
The same thing with the steel. The steel could be used for a more appropriately placed bridge, or for something besides a bridge. Or if you don't need the steel the resources the wealth and resources that was consumed to produce the steel could be put to other uses.
Its very likely that the "bridge to nowhere" plan would have consumed more labor and other resources than the value that its existence would provide. If I'm wrong and the bridge would be actually useful, than its just a poor example, but an actual bridge that really goes nowhere (or say paying people to dig holes and paying other people to fill them in again) would be a net value destroyer, even if you don't consider the additional dead weight loss from taxes (or if taxes where low and simple enough that most of the dead weight loss disappeared). |
