Stimulus II? Don’t base support on Stimulus I
From the Chicago Tribune:
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What also gets overlooked is that most of the stimulus funds haven’t accomplished anything because they haven’t left the vault. Fed Chairman Ben Bernanke told a congressional committee last week that only 30 percent of the money has been spent so far. Nevertheless, President Barack Obama called on Tuesday for a new jobs program. He didn’t set a price tag, but various estimates in Washington put it at $75 billion to $200 billion. Some would be directed to tax cuts to encourage hiring by small businesses, but much of it would go to government infrastructure spending. What is the logic of charging another package to the national credit card? If the previous stimulus is working, it should work even better as the lion’s share of the money finds its way into the economy. If it is not working, however, then there is no reason to think another round would pay off — and besides, the recovery is taking hold in spite of its failure. . . [AO: The Tribune makes the argument that there is no need for a second stimulus because either the current one is working and will continue to work as the remaining funds, as much as 70% of the total $787 billion, is appropriated or the current stimulus is not working and therefore there is no need for a second stimulus. This misses the fact that the first and second stimuli are not the same. The first stimulus focused on a few big businesses sectors, banking, auto, insurance, and some infrastructure. The second stimulus would focus on small businesses and employment. The argument the Tribune makes is that either stabilizing big businesses is working and is all we need or it will not work and we therefore don’t need a stimulus for small businesses and job creation. Obviously, it seems an odd argument when put this way. This is because the Tribune uses the word stimulus as if both stimuli mean the same thing. However, each stimulus is targeted at different parts of the economy. The first was for big companies. The second would be for people.] |
For months, congressional Democrats have been arguing that the economy needs another federal stimulus package, on top of the $787Read the full opinion HERE.
