“The Big Dig is often treated as a cautionary tale of delays and cost overruns, and I have no idea how the cost-benefit analysis looks in retrospect. And I’m in general skeptical about highway expansions. But there sure have been benefits; and would the money really have yielded a higher social return if it had been used to reduce budget deficits, and thereby make more funds available for the housing bubble?”
Messrs. Dodd, Frank and other nitwits in the Congress pushed banks to lend money who had neither the ability nor the willingness to repay it. That caused the housing bubble. Let’s not pretend that the only alternatives for the money were to either piss it away on FNMA loans or to piss it on a poorly-managed infrastructure program in Boston.
The answer to your rhetorical question, Dr. Krugman, is No. It would have been better not to take the money from the taxpayer in the first place.
“Conscience of a Liberal”, my ass.