Obama’s OMB Appointee Peter Orszag Dissents On Infrastructure Plan

Last weekend, Barack Obama presented his plans for a “New New Deal” which entailed the most massive spending on public works and infrastructure since the 50’s because nothing helps blow a deficit and lagging economy like new sidewalks! While this proposal sounds worrisome to most of those outside the Obama White House you’d expect his team to all be on the same page. Someone forgot to tell Obama’s appointee to the Office of Management and Budget, Peter Orszag:

In January, when Orszag was the head of the Congressional Budget office, he presided over a report titled Options for Responding to Short-Term Economic Weakness. One of the options the CBO addresses in the report is using large public works projects to stimulate the economy. Orszag’s CBO calls these “totally impractical.” The report states:

Some of the candidates for public works, such as grant-funded initiatives to develop alternative energy sources, are totally impractical for countercyclical policy, regardless of whatever other merits they may have. In general, many if not most of these projects could end up making the economic situation worse because they would stimulate the economy at the time that expansion was already well under way.

According to Orszag’s CBO, even if you accept the proposition that government spending stimulates the economy, there is a long lag time between conceiving an idea and real action. The CBO report merely acknowledges that the Federal government is not nimble and takes a lot of time to move forward, frequently making the situation worse.

At least Obama will be able to fund this massive project with Congress’ magical pot of limitless gold. Wait, what? There’s not magical pot of gold. Oh yes, then it’ll be taxes. Lots and lots of taxing and spending. Thanks, 52% of America.

Source: IER

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