The Wall Street Journal lays out five reasons why the various plans for a stimulus package being bandied about in Washington are imprudent.
- A package couldn’t be enacted into law quickly enough to head off whatever economic turndown is likely to occur.
- Tax rebates, particularly to the middle class, tend to be saved rather than spent and, consequently, don’t achieve the presumed objectives for fiscal stimulus.
- There’s still plenty of room for monetary policy to act.
- The data don’t look that bad.
- The cost of failure is likely to be worse than the benefit of succeeding.
Read the whole argument.
There is, however, an overwhelming, irresistible reason to enact a hastily considered stimulus plan into law: votes! A mad dash for reelection is likely to overrule every other argument.