The Soviets sure did love infrastructure. Worked out well for them.
(From Real Clear Markets)
Now, I really shouldn’t pick on Cramer in particular, as government infrastructure spending has been a favorite of the Left since John Maynard Keynes and the Great Depression. Unshackled from disciplined thinking about how markets and incentives actually work, Keynes gave assorted economists an excuse to serve up justifications for all kinds of government spending programs.
In the political world, for as long as I can remember, Democrats in particular – though Republicans certainly aren’t immune – have been proclaiming that the nation’s infrastructure is falling down, and that federal infrastructure spending will be a big boost to the economy. We certainly heard that when President Barack Obama took office. Remember how “shovel ready” projects were going to drive the economy forward? That didn’t really work out too well.
No one should be surprised at the dismal results. After all, government pouring concrete is not how an economy grows. If it were, then the Soviet Union would still be around and achieving ever-greater heights of wealth.