, Columnist
Fixing America's Roads Is a Great Opportunity
Government spending on infrastructure looks better than the alternatives.
A good investment.
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Many politicians and commentators are calling for a big burst of spending on infrastructure. On his blog, my esteemed Bloomberg View colleague Tyler Cowen raises an interesting question: What is the opportunity cost of government spending -- that is, what is the value of the other uses to which the money and resources could be put?
To answer this question, Cowen applies a mix of concepts from macroeconomics and corporate finance. I’d like to think about this question more generally. In fact, government isn’t like a business, so we have to be very careful about how we think about cost-benefit analysis.