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Welcome to Hooverville

March 31, 2010

Herbert Hoover battled the Depression in part by cutting government construction spending. Virtually all economists now recognize this to have been a major public policy blunder – something that significantly worsened the nation’s economic decline.

Yesterday, Governor Paterson suspended hundreds of construction projects paid for with state funds. Citing New York’s fiscal crisis and the lack of a new state budget, the Paterson said all projects not paid for by federal economic stimulus funds would be halted indefinitely.

This move comes on top of the administration’s continued opposition to reauthorization of IDA financing for non-profit construction projects. The expiration of this law more than a year ago has stalled $2.3 billion in new construction by hospitals, nursing homes, affordable housing and community groups.

We don’t seem to understand history or economics in New York. We only know how to make matters worse.

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