Quebec's Hockey Arena

Millions for the Olympics in Vancouver ... yes. Millions for  a hockey arena in Quebec City ... no.

So many things to be said about the proposed government funding of the hockey arena in Quebec City. A city without a professional hockey team. A city vying for the 2022 Winter Olympics. All of it has been said by our colleague Niels Veldhuis in a Financial Post commentary. (Click here for article).

The Olympics brought thousands of tourists to Vancouver/Whistler and, while the jury is still out on net benefits, there were definite positive benefits to the BC economy.

What was left out of the commentary is the stimulus effect that the construction creates. Keynesian fiscal policy, the type advocated by the likes of Paul Krugman, prescribes increased government spending, financed by borrowing when the economy is in recession. There are so many article written refuting the benefit of such a policy that it is widely disregarded. The problems include such things as recognition lags, administrative lags, implementation lags, and various forms of crowding out.

An article that appeared on Yahoo News indicates that the City of Los Angeles spent $70 million in federal stimulus money and created a total of 7.76 jobs. Now that's efficient. (Click here for article)