Okay, tucked safely away from the hate trolls on Movin' Meat, can we talk about the stimulus package. I think 1/3 going to tax cuts to fulfill a campaign promise is fine. I'm moderately convinced that tax cuts are bad way to stimulate spending, but whatever.
I think the rough 1/3 to infrastructure and research is basically so super cool I am beside myself. An end to the war on science plus addressing the decades of neglected roads, bridges, etc. I mean, all while putting people to work. Holy shit, that is cool.
Regarding the 1/3 to stuff like assistance to those hurt by the down turn and education spending. Excellent again in my mind. When people lose their jobs they don't send their kids to daycare, and eventually it means they can't pay for their high priced lawyers.
My point is, that even though it is not always the case, I am as privately excited about the stimulus package as I am publicly. What should I be worried about?
BTW, I recognize there are long-term possible problems. I'm not super interested in those if they are something like well, if x happens, then y might happen and that could lead to . . . You see what I mean. If on the other hand, x problem leads directly to the deficit passing some critical level that will lead to higher interest rates, that's more interesting to me.
2 comments:
I read on an economics blog (FWIW) that the stimulative effect of tax cuts is something like $0.6 in GDP per dollar cut, whereas the effect of spending is $1.5 per dollar, so they both work, but spending works a lot better. Having said that, I too was OK with the tax cuts -- the AMT fix was necessary (though kind of irrelevant to the stimulus -- it was coming anyway) and the tax cuts were reasonably progressive. I agree that tactically, Obama should not have put the cuts in from the beginning, but in negotiation, as a concession *in return* for GOP votes.
My biggest concern about the rest of the stimulus is the adequacy of the bill. When I read about the $2 trillion GDP gap, and Krugman is saying that this bill is just not big enough to accomplish its purpose, I worry. I don't know enough to judge it myself, but I respect Krugman a lot. Now, there's nothing saying that Obama can't go back for more infrastructure spending and maybe he will. I hope so.
My overall take on it is not very sophistcated, but it boils down to being pretty much results oriented. If it turns out that jobs are in fact created in the short term and the foundations of long term improvements in environmentally positive energy policy and transportation infrastructure, medical service and tech efficiencies, state and local services maintained, poverty relief, etc., etc. are laid, and if it somehow leads into a national debt averse, long view fiscal responsibility and regulation, than I'll be thankful that I trusted the new guys to be wiser than the old guys. I am confident that Obama and the balance of the congressional Dems are on the moral, intellectual, theoretical, and recent history high ground, but nothing I read tells me that the best minds are much more than 51% confident that this is gonna work.
The dilemma I have is that while I think the Republicans and the blowhards have been so hypocritical and self-serving and myopic and occasionally outright evil and everything else that they have lost all credibility, it unfortunately doesn't mean that every concern they bring up is wrong.
Still I'd rather the ship go down with a captain I respect than one I don't.
As to Shadowfax's point about the political leverage the tax cuts might have made available, one of the things I feel best about regarding Obama is that he's truly walked the walk and kept above that sort of thing. I think his best understanding of the situation was that certain kinds of tax cuts, incentives, etc were actually in the best interest, not of his plan or party but of the country, and he wanted them in there because they were a good idea. I think he is clearly aware of the political angles, and whatever his gift is in that area it's that he sees the way to win those battles long term is to not manipulate them short term.
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