How do economists feel about the stimulus package?
Saturday, March 6, 2010 10:19Posted in category 2009 Stimulus Check
yeah really, are there?
i want a stimulus package »”>stimulus package, but there are so many alternatives.
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simplicitus says:
March 6th, 2010 at 11:04 am
1. Almost all economists agree that some sort of government stimulus is needed. (Though some won’t use that language)
http://www.becker-posner-blog.com/archives/2009/01/on_the_obama_st.html
But a few don’t:
http://www.cato.org/special/stimulus09/cato_stimulus.pdf
But, of course, just about every economist thinks s/he could devise a better one than the one passed by Congress.
And there is no one in Congress or the White House that thinks this is the ideal package (it is certainly not the package that the administration originally proposed – Congress made significant changes)
2. Many economists believe that a much bigger stimulus is needed.
http://money.cnn.com/2009/03/13/news/economy/more_stimulus_possibility/index.htm
3. There is significant disagreement about the balance between more government spending and bigger tax cuts.
http://www.newyorker.com/talk/financial/2009/01/26/090126ta_talk_surowiecki
http://www.usnews.com/blogs/capital-commerce/2009/1/27/10-reasons-to-nix-the-stimulus-plan.html
One of the factors is what the “spending multiplier” is for government spending vs. private spending.
http://en.wikipedia.org/wiki/Multiplier_effect
http://gregmankiw.blogspot.com/2009/03/new-keynesian-multipliers.html
http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090127_702149.htm?campaign_id=bwdaily_related
Another is just how rapidly the effect of the additional spending will be felt. Some have argued that it won’t be felt until the money is actually spent, while others argue that just knowing the spending has been scheduled has an effect. Some expect most of the money to be spent ’soon” while others feel that it can’t be.
http://townhall.com/columnists/ThomasSowell/2009/01/27/what_are_they_buying
4. Whatever your favorite stimulus package might be, how likely is it to pass Congressional scrutiny? Recall that even if the Democrats were to agree completely with the White House and present a united front, they would still need to get at least a couple of Republican senators to agree.