Advantage: Asymmetrical Information. The Wall Street Journal reports:
It turns out, though, that shovel-readiness is in the eye of the beholder. Soon after his visit, Mr. Biden found out that his model stimulus project wouldn't see a shovel for almost four more months, possibly longer, knowing how such timetables slip. In North Middleton, a White House eager for action had run up against locals eager to avoid disruption. The locals won.
States are quickly assembling their construction wish lists. But it takes time to advertise for contractors, collect bids, check the numbers, pick a winner and get work underway. A typical paving project -- easy roadwork -- takes close to three months from the time the money is approved to the arrival of work boots on the ground, according to the American Association of State Highway & Transportation Officials. "It is not an instant process," says a spokesman.
Is June too late? Well, that depends. if you believe the administration's economic forecasts, growth is going to turn around in the second half of the year. The money for the easy-peasey projects will thus be arriving just as the economy stops free-falling. Since stimulus takes more than a year to work its way through the economy, it will not have much effect. This is why one of the main critiques of stimulus rests on political economy rather than pure economy theory: it's simply hard for the American government to deliver stimulus in the narrow window it needs to work in.
If you don't, and think we'll continue to free fall, then June is . . . well, not fine, but okay. On the other hand, you'd better be nervous as hell about the administration's budget numbers.
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