This one is going to leave a welt. When Barack Obama's pick for budget chief, Peter Orszag, ran the Congressional Budget Office, here is what it had to say about a stimulus plan almost exactly like the one Obama is now proposing (bold is mine):
"Practically speaking, however, public works involve long start-up lags. Large-scale construction projects of any type require years of planning and preparation. Even those that are "on the shelf" generally cannot be undertaken quickly enough to provide timely stimulus to the economy. For major infrastructure projects supported by the federal government, such as highway construction and activities of the Army Corps of Engineers, initial outlays usually total less than 25 percent of the funding provided in a given year. For large projects, the initial rate of spending can be significantly lower than 25 percent.
Some of the candidates for public works, such as grant-funded initiatives to develop alternative energy sources, are totally impractical for countercyclical policy, regardless of whatever other merits they may have. In general, many if not most of these projects could end up making the economic situation worse because they would stimulate the economy at the time that expansion was already well under way."
Me: The case for tax cuts grows. (Thanks to the Institute for Energy Research.)