The Corps of Engineers has done a study and Congress is considering a public works (shovel-ready maybe) project

The Corps of Engineers has done a study and Congress is considering a public works (shovel-ready maybe) project. It is a flood control system. The dam and flood control system can be constructed in different sizes or stages, offering different levels of costs and benefits. The following data reflect the best available regarding costs and benefits.

Stage               Total Cost                  Total Benefits

1                      $ 55,800                     $ 60,000

2                         66,900                        78,000

3                      78,000                      95,000

4                      90,000                      107,000

5                      101,400                      117,000

6                      110,600                      122,000

Note: Both costs and benefits are total amounts—in thousands of dollars. These are merely alternative levels or stages between which to choose. That is, Stage 2 includes everything in Stage 1, but the total cost of building a Stage 2 dam is $66,900. The question is whether to build no dam/flood control system at all; only a smaller scale project which, of course, will cost less and will provide only limited flood control benefits, or to go all out and build a much larger (higher stage) structure that will yield even greater flood control benefits, but also provide recreational and other benefits.

Use your skills of economic analysis to advise Congress. However, this time we want good economic advice and not necessarily good political advice.