Sometimes government spending is better than a tax cut

Andrew Samwick (inspired by today's Krugman column) says he told us so:

What we should have done back in January is to start planning for a future in which the consumers, finally, would sensibly retreat (not capitulate) from their debt-laced consumption rampage.  Some people [Samwick, that is] were suggesting the following in January:

"[W]e can plan well in advance. The federal government has a critical role in maintaining and developing public infrastructure, whether in transportation, telecommunications or energy transmission projects. A sensible capital budget would include a prioritized list of projects that need attention. Some would be slated for this year, some for 2009 and so on, over the useful lives of the projects. When economic growth falters, the government would be in a position to move some of the projects from later years into the present year."

Had we started this nine months ago, the projects could be coming on line now.  These would be capital projects that the country needs.

Instead, Congress approved and the President signed into law a tax rebate that, as Samwick puts it, boosted consumption and made Q2 GDP look deceptively good but left few if any lasting benefits. And now lots of people are jumping on the infrastructure bandwagon but we're faced with a choice of either rushing projects and probably doing a bad job with them or doing things right but not getting any economic oomph.

I think this is part of a bigger attitude problem that developed (for some pretty good reasons) as part of the Reagan revolution but now tends to stand in the way of intelligent governance. It's that new government spending is almost always seen as problematic while tax breaks--even selective ones that are really tantamount to government spending--are okay. This is a bipartisan phenomenon, although I guess the Democrats' participation in it has come mostly out of fear that they'll be attacked by Republicans as tax-and-spenders. But it ought to be perfectly possible to be a fiscally responsible, respectful-of-the-citizens'-money tax-and-spender. Just as the current occupant of the White House has shown that it's perfectly possible to be a fiscally irresponsible, disrespectful-of-the-citizens'-money tax-cutter.