Shovel-Ready is No Viable Standard

Much discussion of the "stimulus" bill refers to shovel-ready projects, meaning those activities for which plans have been drawn and are ready to be implemented quickly.

While speed of any stimulus plan is critical, which is one of the major faults of all the plans proposed by the Democrats where much of the spending is deferred into 2010 and beyond, the problem with many of these projects is that they are a waste of money.

As an extreme example, imagine the government pays 100 people to build a big pile of rocks. Those 100 people get paid salaries and trucks are rented which helps the construction firms - all of which increases spending (it also increases debt, which I have discussed previously).

But then we are left with just a pile of rocks.

Contrast that with private construction activity, which actually builds something of value - whether it is a consumer purchase such as a home or a business investment to produce new goods and services.

While the multitude of projects embedded in the House's "stimulus bill" are not quite the equivalent of building rock piles, many if not most are of dubious value.

That is just one virtue of tax cuts as a genuine stimulus plan, since the people and companies receiving the tax cuts will spend or invest that money with a focus on doing things which they value - whether it is purchases of consumer goods or investments they believe will create value.