Don't adopt the Japanese model of stimulating the economy

The Wall Street Journal recounts the history of Japanese efforts in the 1990s to revitalize their economy by massive government spending on infrastructure projects. It failed, as they say, miserably. Obama and his economic advisers should learn from that history and not duplicate Japan's mistakes.

As January 20 nears, Barack Obama's ambitions for spending on the likes of roads, bridges and jobless benefits keep growing. The latest leak puts the "stimulus" at $1 trillion over a couple of years, and the political class is embracing it as a miracle cure.

Not to spoil the party, but this is not a new idea. Keynesian "pump-priming" in a recession has often been tried, and as an economic stimulus it is overrated. The money that the government spends has to come from somewhere, which means from the private economy in higher taxes or borrowing. The public works are usually less productive than the foregone private investment.