Government Spending Good Money on Silly Projects
Economic stimulus is all the rage it seems, both here in the US and back home in Malaysia. While I am skeptical of stimulus in general, our government's spending plans are increasingly ridiculous and insensible day by day.
Instead of leaving the era of white elephant megaprojects behind, we seem to be pursuing less obscenely grandiose but equally impractical infrastructure projects.
The basic idea in the minds of stimulus and economic pump-priming proponents is that it is cheaper to borrow money in a recession. People and firms are not confident in the economy, and so they are reluctant to lend money out to any random person. Fortunately, the government can soak up these surplus funds and invest them in something useful for a low cost.
That is the theory anyway; the reality is that the government rarely seems to do much useful investing with our money. Yes, granted, they have brought a lot of "development" to our shores. The North-South Expressway, our various ports, our schools, our universities, so on and so forth—all good stuff. But for almost every good project, you can name an equal number which are just downright bad ideas.
To take one egregious example, the federal government is presently proposing to spend RM9 billion on the "Pahang-Selangor Raw Water Transfer Project." The crux of the project is that they want to build a gigantic pipeline to funnel water from Pahang to Selangor. Why? Because the federal government believes that by next year we will be facing severe water shortages in Selangor unless this pipeline is built.
