Today's WSJ Editorial says that Obama's ambitious stimulus plan of spending over a trillion dollars of government funded projects including roads, bridges, and jobless benefits is not a new idea. "Keynesian 'pump priming; in a recession has been tried, and as an economic stimulus, is overrated. The money that the government spends "has to come from somewhere, which means from the private economy in higher taxes or 'borrowing' (Governments are good at borrowing; they are called bonds which governments say will always be paid back in revenues collected. Interpretation: if things don't pan out as projected the taxpayer makes up the deficit. And projections seem to be lately, a dime a dozen.
Public works are usually less productive than private investment. Japan tried these Obama approach in what is called the lost decade in Japan from 1992-7. These spending reforms have now been rolled back but only after their national debt had exploded. However, Japan does have a lot of good roads but they too, are returning to the bad habits of the 1990's.
Now we're being told that a similar spending program--a New Deal--will revive the U. S. economy. How do you say good luck in Japanese."