John Taylor on Stimulus and Infrastructure

Here is John Taylor’s recent New York Times Oped:

http://www.nytimes.com/2011/09/07/opinion/not-more-of-the-same.html?_r=1

Taylor is an economist at Stanford and a fellow at the Hoover Institute. He has a very influential monetary policy rule named after him:  the “Taylor Rule.”

Taylor opposes more stimulus and believes that previous stimulus was ineffective. Although I’ve put up previous work by him before, this article caught my attention because just last night a fellow econ PhD student and I were discussing why it is so hard for the government to promote effective stimulus via infrastructure projects. I think Taylor’s brief explanation of what happened in the previous stimulus a la infrastructure is really interesting:

“Another part of the new plan would ‘put construction crews to work rebuilding our nation’s roads and railways and airports.’ That too was tried in the 2009 stimulus. My colleague John F. Cogan and I found that state and local governments put most of the money in their coffers. The federal government also undertook its own construction programs, but, with few shovel-ready projects, it could only increase infrastructure spending by an immaterial 0.05 percent of G.D.P.”