Front page headline in the Financial Times this morning is that the IMF is advising the UK to spend more in infrastructure so as to help escape the recession.
Well – doh – infrastructure spending is about the daftest way there is to deal with a recession and for the blindingly obvious reason that it often takes years to get infrastructure projects going – never mine the number of years it takes to complete them. And by that time the recession may be over.
Of course the amount to spend on infrastructure should be under constant review, and (statement of the obvious) the objective should always be to spend whatever the optimum amount is. But that’s all LONG TERM stuff.
Sudden increases in infrastructure spending is not a clever way to try to escape a recession. Apart from anything else, attempts at sudden increases in spending on ANY AREA is likely to run into skilled labour shortages, even in a recession.
| International Monetary Fund. Vacancy. A vacancy has arisen at the IMF for an economist. Pay and perks are generous, and the successful candidate will enjoy early retirement, all gratis the World's long suffering taxpayers. The successful candidate should be able to demonstrate a complete ignorance of economics and be devoid of common sense. Apply in person to Christine Lagarde who is currently appearing in court in Paris in connection with alleged embezzlement of public funds while she served under Francois Mitterand (probably in more than one sense of the phrase). |
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