HOW TO SPEND $100,000,000.

HOW TO SPEND $100,000,000. I spoke recently with a friend who works for a federal agency that received a large amount of money under the stimulus bill (I chose $100,000,000 to give you an idea of the number of zeroes involved). What criteria should the agency use? The idea of the stimulus is to spend money quickly, but projects are not usually ranked or selected using that criterion. I suggested that in the calculation of the benefits and costs of the project, the cost of any resources used in the next year (or perhaps the next seven quarters) should be assumed to be zero. This is one way to implement the logic of the stimulus that there are extra resources in the economy that are not being used at this time.

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