As Obama promises massive public works spending, it is worthwhile looking at Japan, which has tried to use massive public works spending to lift its economy out of the doldrums for the better part of two decades.  The problem always is that when politics is in command of investment decisions, some useless projects get built at huge cost, while more pressing needs get ignored. After trying to preserve existing corporations for about a decade (known in retrospect as the "lost decade"), Japan finally bit the bullet and let major banks and other companies fail and be absorbed. That has helped it recover, but the economy still relies far too much on government spending, which hasn't really accomplished the goal of boosting economic growth.

The government and Ibaraki prefecture, home to 3 million people, are paying for the airport north of Tokyo, which won't have train services and is a half-hour drive from Ibaraki's capital, Mito. Japan Airlines Corp. and All Nippon Airways Co., which operate 90 percent of flights in the country, don't plan to use it.  ...

Japan has borrowed money every year since 1965 to finance its budget, saddling each household with the equivalent of 17 million yen ($182,000) in debt. The spending has pushed the government's debt to the highest among the Group of Seven economies -- 170 percent of annual gross domestic product last year, compared with 63 percent in the U.S., according to the Organization for Economic Cooperation and Development.