Wednesday, January 23, 2008

Better ideas than mine

Here are even more - and to my mind make excellent sense - ideas for a stimulus, if indeed we are bound and determined to have one.

Of course, the problem with both fiscal policy - having to do with taxes and spending - and monetary policy - interest rate and reserve controls - is that both work slowly. Neither are particularly effective short-term remedies. Both are very important in their own ways, of course. As someone noted online today, never has there been a three-quarter-per-cent rate cut by the Fed at one time. Never. And keeping up the safety net for those who need it, like the article above is suggesting, is important also, since it takes time for jobs to be recreated or reconfigured. At the same time, check out the following (click on the image to enlarge):

(New York Times, op-ed online, 1/23/08.)

Our fiscal policy rescues, it seems, have often come far after the official recession has ended. Does that mean I think we shouldn't have one? I think we do, if only for political reasons. It will raise the deficit, but I'm persuaded at the moment that this is OK. But as I have said, I want the relief to go to those who really need it. That means the middle class and the poor, to my mind.


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