Friday, January 30, 2009

They're Going To Screw Up the Stimulus, Aren't They?

I'm going to throw a crazy idea out here right now, and I'd like you all to tell me if it sticks:

No one knows what must be done to save this economy, and the most dangerous people out there right now are the "opinion leaders" who believe that they do.
The conventional wisdom is that there needs to be an economic stimulus plan. This seems generally not a subject of serious controversy: Robert Reich tells us that "almost every economist will tell you the stimulus has to be massive." As with everything, there are skeptics out there, but rather than render myself completely paralyzed by epistemology, I'll buy into this premise.

But after walking hand-in-hand this first mile down the Road to Recovery — stimulus: oh yes, absolutely! — we confront the question:

What sort of stimulus?

and suddenly the consensus is dissolved, and everyone parts ways. We scatter all over the opinion landscape, and we start throwing rocks at one another — because this is what we do.

We need big, fat tax cuts right now, the Republicans are shouting, so that our businesses can snap out of their shock and get back to work.

No — it's about spending, respond the Democrats. The government has to channel the money into much-needed long-term investment.

Well, which is it? Is it both? Is it neither? Some combination of the two? If so, what's the magic recipe? How much in tax cuts? How much in spending? Nobody seems to agree, and all our livelihoods are hanging in the balance.

I wish I could say I trust one or the other party to do the right thing, but the circumstances pretty strongly suggest that I shouldn't. Why should we believe that the Republicans are thinking this through and arriving at their opinions on the merits, rather than on ideological orthodoxy and the principle of partisan opposition? It's just too convenient that their answer to this extraordinary question is the same as it is to every other question: more tax cuts, and what money the government does spend should go to defense contractors. And the GOP's sealed-up party-line vote in the House says more about opposition discipline in the caucus than it does about the merits of the bill. I'm suspicious that the Elephants in the Room voted as they did simply to serve notice to the President that they won't be pushovers.

As for the Democrats, they started with a number — an empty bucket, and they've been asked to fill it up, to the tune of $800+ billion. They've been decidedly uncreative with their recommendations, and one wonders if they're just recycling the party priorities that sat languishing during the Contract with America and Bush Administration years. Suddenly and somehow they've gone and rebranded the economic stimulus package — a term that suggests a jolt of adrenaline to the swooning patient — as a "recovery and reinvestment" plan. I don't feel like the Dems are keeping their eyes on the prize.

I'm not averse to tax cuts, and I generally think reinvestment — in research, infrastructure, defense — is a good idea. Far better than taxing the crap out of us and throwing the money into entitlement program holes. But this is an emergency bill. It's important, and I'd feel a lot better if (1) the folks on both sides weren't so confident that they have all the answers, and (2) the answers they're selling weren't so suspiciously consistent with party orthodoxy.

Partisan push-and-pull is all well and good, but what we need in the end is a bill that reflects each party's best ideas, not some watered-down compromise that gives every ideologue something to brag about to his/her constituency.


Mithridates said...

This is not a stimulus bill. According to everyone but the Democrats themselves, only a small portion of the money will be spent this year and much of it after 2010. Perhaps that's why they don't call it stimulus anymore. I like the part of it that goes into infrastructure and investing in future technology, etc., - in other words, where my ideology overlaps with the Dems'. But they're lying hypocrites if they tell you this is about reviving the economy. It's about using the cover of a recession to get what they've always wanted done done. I remember a group of Republicans who did a similar thing.

And, of course, you're right on with the Republicans. It doesn't matter the situation. After long, hard, objective calculations they will inevitably come to the conclusion that only tax cuts will help. If it's a recession, "we need tax cuts to stimulate the economy"; if it's a boom, "we need to make these tax cuts permanent; what, you want to raise taxes and kill the booming economy?"

This had better damn well coincide with entitlement reduction and scrapping wasteful programs as the Big O promised . . .

Unknown said...

I had an economics professor once suggest that if you want to stimulate the economy, simply bury large sums of money in secret hiding places around the country and then leak to the public that they are out there. His thought was that if the sums were large enough the frenzy around trying to find the money would create a new industry with new jobs. A govt created gold rush. Somehow I would be more confident in that than this "stimulus."

My only hope is this that the Big O comes true on one promise and that is to make public on a web site where every govt. dollar is spent. If he does this the public will police this vehemently.

But I say any dollar that is targeted at Wall St. or GM, just put in a bag and hide and start a nationwide treasure hunt.

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