From TPM Reader RS …
One point that been bugging me in the current stimulus package debate is the notion that scheduling infrastructure spending for 2010 or 2011 won’t have any immediate impact on the economy.
Economic crises are ultimately about loss of confidence, i.e., a lack of faith in the economy’s future. For this reason knowing that government money will be spent not only this year, but for years hence, is actually more stimulative than a quick launch of make-work projects whose effects, while immediate, would be quickly discounted as short-term.
Knowing Uncle Sam is willing to stimulate aggregate demand for years, not just for a few quarters, is just the kind of long-term reassurance companies need to plan ahead and entrepreneurs need to restore flagging animal spirits.
