Fast And The Furious: Tokyo Adrift

I came across this New York Times article by way of Greg Mankiw’s blog. Mankiw is a professor of economics at Harvard University who runs a neat economics blog in his spare time.

When faced with a similar economic downturn in the early 90’s following a real estate bubble, Japan embarked on its own program of massive spending on public works.

Did it work? The answer, frustratingly but not surprisingly is maybe. After all, this is economics we’re talking about. After over a decade of spending, Japan accumulated the largest public in the developed world, but has recorded anemic growth to show for it.

But since Congress appears determined to take us over these falls, the story does provide some interesting lessons as to where and how to spend. Are you taking any notes, Rep. Obey?