The proposed “Stimulus” Package is on line now.
As Glenn Reynolds says, it’s basically a massive transfer of wealth to the politically connected from the politically unconnected.
[Update a few minutes later]
Robert Samuelson has some gloomy thoughts:
in practice, the stimulus could disappoint. Parts of the House package look like a giant political slush fund, with money sprinkled to dozens of programs. There’s $50 million for the National Endowment for the Arts, $200 million for the Teacher Incentive Fund and $15.6 billion for increased Pell Grants to college students. Some of these proposals, whatever their other merits, won’t produce many new jobs.
Another problem: Construction spending — for schools, clinics, roads — may start so slowly that there will be little immediate economic boost. The Congressional Budget Office examined $356 billion in spending proposals and concluded that only 7 percent would be spent in 2009 and 31 percent in 2010.
Assume, however, that the stimulus is a smashing success. It cushions the recession. Unemployment (now: 7.2 percent) stops rising at, say, 8 percent instead of 10 percent. Still, a temporary stimulus can’t fuel a permanent recovery. That requires a strong financial system to supply an expanding economy’s credit needs. How we get that isn’t clear.
I hope it doesn’t take another war to get us out of this.
Rand,
I think you put the “UN” on the wrong connected!
Actually, I mixed up “to” and “from.” Thanks.
Our idiot master in Congress have absolutely no idea how to deal with the credit crunch, or they’re cynically not doing anything about it and just using it as an excuse to grab power and spend money on their preferred pork products.
Jerry Pournelle keeps saying that ‘despair is a sin’, but it’s such a seductive one…
“That requires a strong financial system to supply an expanding economy’s credit needs. How we get that isn’t clear.”
Of course it is! We’ll simply BORROW our way out of debt!
There is another alternative. To increase the money supply and get South American like inflation.
Samuelson would be more persuasive if he didn’t cite a CBO report that doesn’t actually exist.
http://www.huffingtonpost.com/2009/01/23/a-controversial-cbo-repor_n_160495.html
Oceania has always been at war with East- I mean, Eurasia…
Meanwhile, back in the real world, here’s a _reputable_ news source discussing the non-existent CBO report:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahWN3qYh1ZMs&refer=home
Mark, but the entire monetary system is designed only for that. The “growth” wont happen without more borrowing, its designed into the fractional reserve banking system. You cant get out of this hole without rebooting the system.
xj: Samuelson’s piece was published Sunday. The actual CBO report was released Monday.
xj: Samuelson’s piece was published Sunday. The actual CBO report was released Monday.
Apparently it exists. Thanks for actually admitting your mistake, Jim. First time for everything.
Jim, your news link indicates the report was leaked before Monday.
Karl:
No, it indicates that a preliminary analysis of only part of the stimulus bill was leaked. That’s what Samuelson (and, by one count, 81 different TV news segments) based his argument on, without any mention that he hadn’t seen the actual report.
So what does the CBO actually say about the need for a stimulus?
“The nation’s current recession is likely to be the longest since World War II, and by some measures could be the worst since the Great Depression, a new Congressional Budget Office forecast said Tuesday.
Without a major economic stimulus plan, “the shortfall in the nation’s output relative to its potential would be the largest — in terms of both length and depth — since the Depression of the 1930s,” said new CBO Director Douglas Elmendorf in testimony prepared for the House Budget Committee.
The analysis is sure to add important momentum to the effort to enact an $825 billion stimulus by mid-February.”
http://www.mcclatchydc.com/251/story/60822.html