The Case Against a Stimulus Package

The Wall Street Journal lays out five reasons why the various plans for a stimulus package being bandied about in Washington are imprudent.

  1. A package couldn’t be enacted into law quickly enough to head off whatever economic turndown is likely to occur.
  2. 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.
  3. There’s still plenty of room for monetary policy to act.
  4. The data don’t look that bad.
  5. 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.

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