The Logic of Make-work Projects

Mark Thoma has a blog entry addressing an article by Samuel Brittan in the Financial Times. I wan't particularly impressed by Brittan's material, but I did enjoy this observation by Mark Thoma:

Keynesians also note that even if the government spending has zero value initially, e.g. paying half the idle workers to dig ditches, and the other half to follow behind and fill the ditches in again, as those workers spend their new income in the community it will generate productive private sector activity. Thus, even if the initial projects are of little or no value, it can still be the case that we are better off having the government intervene than we would be if we did nothing at all. The government should do everything that it can to pursue the highest value projects, but the fact that there may be some waste in the process does not, in and of itself, mean that we'd be better off leaving those resources completely idle and doing nothing at all.