File This One Under "Better Late than Never"

The Free Exchange blog at The Economist posted yesterday about "the stimulus that should have been."  The complaint -- too little infrastructure spending:

It's even more frustrating that this is so when one considers that substantial infrastructure investments will be necessary in any case, as stimulus or not. And it's outright maddening when you recall that massive economic slack and falling resource prices, thanks to the recession, would allow a given dollar of infrastructure spending to go a long way indeed.

But there was felt to be a limit to which money could be allocated to the infrastructure cause, based on shovel-readiness; if too few projects could take advantage of the available funding while the economy was still weak, then that funding would make for poor stimulus and could be better used elsewhere.

There is no use crying about it now.  After all, it's not like anyone proposed serious alternatives to firing money out of a cannon while blindfolded (a.k.a. timely, targeted, and temporary) as a way to stimulate economic activity.  Two years ago, where were the people proposing a better way to deal with downturns or a budget that plans for the future by taking such a long-term view of infrastructure investment?

So what should our elected officials do about it today?  Two things.  First, begin to implement long-term infrastructure investments as a means of smoothing needed expenditures over the business cycle (and thereby smoothing out the business cycle).  Last time I checked, the unemployment rate was still climbing.  The need for both infrastructure and fiscal stimulus has not passed you by.  Second, apologize for waiting two years and wasting hundreds of billions of dollars on the wrong ideas before getting around to doing what has been needed all along.

The clock is ticking.