Citizens pay taxes
Meaning that the citizens are deprived of a certain amount of investment or spending depending on their own personal objectives. This investment and/or spending is effectively eliminated from economic activity. The purchasing power associated with taxed money is not created out of thin air; it represents a direct extraction of purchasing power from private individuals and companies, and a corresponding elimination of economic activity that would flow from that purchasing power.
Govt determines projects
By bureaucratic whim; not by any recognition of the natural market indicators such as a natural interest rate and profits and losses. Instead of calculating a project based on consumer preference, a bureaucrat makes a decision on a whim. Thus, guaranteeing a waste of precious resources by operating on whims versus real business calculation.
Govt hires private contractors
In response to campaign donations and other bribes.
Contractors build roads and bridges
Possibly to nowhere. Certainly not with respect to profits and losses; and with no market accountability.
New jobs create lasting ripple effect
Remember the investment and/or spending that was extracted from the economy in the first place? What do you think would have happened with that? Not a ripple, right?
In addition to new investments
You mean to repeat the cycle of stealing and spending money upon bureaucratic whim. Calling that an investment is the euphemism of the year.
Economics in One Lesson:
https://mises.org/library/economics-one-lessonEdited by ummmm at 11:19:18 on 08/17/17