Public works 'investment' hasn't worked in Japan

As Obama promises massive public works spending, it is worthwhile looking at Japan, which has tried to use massive public works spending to lift its economy out of the doldrums for the better part of two decades.

The problem always is that when politics is in command of investment decisions, some useless projects get built at huge cost, while more pressing needs get ignored. After trying to preserve existing corporations for about a decade (known in retrospect as the "lost decade"), Japan finally bit the bullet and let major banks and other companies fail and be absorbed.

That has helped it recover, but the economy still relies far too much on government spending, which hasn't really accomplished the goal of boosting economic growth...

[when government spends money it has only two possible sources for it: robbing it from taxpayers/the private sector, or printing it afresh, making every ones' dollar less valuable. FDR showed us that massive government spending is exactly the wrong thing to do now - yet here we go...]

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