The first three paragraphs allude to the obvious. Government has been so conditioned by 30 years of Reaganism that the only acceptable tool for every problem is a tax cut.
It's politically impossible to do the right things to fix the problem, so which politically possible action will do the least harm?
Wanna put people to work? Then hire them to do stuff. Duh.
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It is by having hands that man is the most intelligent of animals - Anaxagoras