Digging Holes

An important reminder from N. Gregory Mankiw, a Harvard economist, to be skeptical of government "stimulus" spending, and particularly of the statistics used to justify it:

If you hire your neighbor for $100 to dig a hole in your backyard and then fill it up, and he hires you to do the same in his yard, the government statisticians report that things are improving. The economy has created two jobs, and the G.D.P. rises by $200. But it is unlikely that, having wasted all that time digging and filling, either of you is better off.

HT to John Derbyshire, who suspects "there'll be a lot of $100-hole-digging in the nation's near future".