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April 13, 2009

Saving by Spending

I can't quite figure this one out:

Transportation Department officials say that because so many contractors want a share of stimulus money, competition is driving down costs by about 15 percent to 20 percent.

So before the stimulus money, when Transportation Department money was "scarce", there wasn't competition for the money? But now that there is a lot of money available, there is competition that drives down costs?

Hrm. It sounds to me that the government should definitely spend money on infrastructure during a recession. Not because Keynes said so, but because the contractors will scramble for any job and do it on the cheap. I mean, government has to attend to infrastructure anyway, so I guess the cheapest time to do it is when workers are down and out and will do anything for a buck.

The trick to that, of course, is getting government to stop spending money when the economy is booming, because then it's expensive again.

Anybody following that logic?

Wulf Posted by Wulf on April 13, 2009 at 09:09 PM

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Comments

I like your logic. It also reminds me of a line from Armageddon:
"You know we're sitting on four million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder. Makes you feel good, doesn't it?"

Posted by: Nina [TypeKey Profile Page] at April 14, 2009 7:19 AM

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