Tuesday, 6 January 2009

What I don't get about Brown's stimulus

My friends,

We are told that lots of our money will be spent on "infrastructure projects". Who could object? Sounds wonderful…until you stop and think about it.

Does infrastructure include filling potholes, in other words upgrades and repairs of our already dilapidated structures? Or will this stimulus package be spent creating new projects as yet unimagined?

Existing infrastructure is often neglected, after all there is little political capital found in filling potholes, especially when compared to spending our money creating shiny new bridges, football stadia and regional parliaments.

These lovely new buildings create opportunities for lavish opening ceremonies that fuel the desire of all politicians for positive free publicity. Who does the same for resurfacing motorways?
The whole process is skewed in favour of new schemes, even if the repair of our existing infrastructure would serve the taxpayer better.

In addition new schemes inevitably require long delays before any ground is broken or cornerstones laid, especially when they are the gift of politicians weighing up the personal advantages to them of myriad special interest groups competing for their share of state largesse (and, indeed, those groups trying to delay the new buildings because of some rare newt or interesting weed).

With the best will in the world it can take years before any money intended to stimulate actually gets into the economy, and who knows what the economy will be like when that happens?

A stimulus package created during a recession can take effect during a period of inflationary growth, and then the law of unintended consequences comes to play as Brown’s economic stimulus is found to fuel even more inflation.

We are told by my good friend Gordon Brown et al that the Tories don’t have economic plans. That’s not true. Tory plans will result in spending now, chosen by the public. Brown’s plans will not help the economy or the infrastructure in the short term, and in the long term may harm both.

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