Delete comment from: Captain Capitalism
And what happens if say the cost of servicing this road is in excess of whatever additional utility it adds? That road would then be a net loss on gdp wiping out whatever benefit was accrued in the short term by paying that unemployed man. If one needs an example then you only need look at Japan, which built numerous white elephant projects, Google Japanese village and highspeed line to nowhere, in the hopes of sparking economic growth. China now is a great example of it. Just because someone is building a road, a building, or a rail line doesn't mean it will add economic value. I'd the demand doesn't exist for it the it; then it is a net loss on gdp. Why? Because of the debt accrued to build it will be in excess, due to interest, of whatever payout you give to the workers. Forgetting this fundemental rule helped lead the US to depression, and soon it will wreck China as well.
May 2, 2012, 8:33:53 PM