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It’s not really free, of course. It must all be paid for in taxes now, or borrowing now and taxes later as interest costs mount. Nor will it necessarily stimulate the economy. Pure Keynesian theory holds that all government spending helps in a recession, no matter how pointless. Keynes’ famous example was burying banknotes in old bottles, so workers could be hired to dig them up. Today, however, there is a consensus that money should be spent on something genuinely beneficial.

Whether the Liberal plan meets that standard remains in doubt. It promises to rush cash out the door as quickly as targets can be identified. “We will flow funds rapidly to ensure that projects can begin immediately,” Sohi pledges. To that end, Ottawa is willing to put the broadest possible interpretation on the term “infrastructure.” Roads and bridges certainly qualify, as do water and sewer projects. All fall under the mandate of governments, are essential parts of a healthy and growing economy, and continue to contribute to growth after the initial outlay. The same can’t necessarily be said for culture, recreation or tourism. Hockey rinks and arts centres may be popular, but have a limited impact on local economies. Clement probably thought his gazebos would spur tourism in Muskoka, but the thesis is doubtful, and Muskoka has much greater attractions than a few gazebos anyway.

It is very predictable that those in line to receive the money will loudly proclaim its benefits. And since the benefits are concentrated and costs dispersed, those who will pay — i.e., taxpayers — are largely silent. The result is a decision-making process driven not by economic but by political gain, which is the great danger of ambitious spending programs. Opposition parties regularly accused the Conservative government of using “stimulus” funds to boost Tory interests. The Liberals are subject to the same temptations.

Despite its eagerness to start spending, the Trudeau government must be careful in evaluating funding requests to ensure there is an authentic benefit to the economy beyond the initial fillip. And it needs to tighten its definition before “infrastructure” becomes a synonym for “boondoggle.”

National Post