The last stimulus of tax rebates stimulated lots of people to pay off some of their debts, which hardly stimulated the economy at all.
The coming stimulus package could be even more nonsensical. It will be voted on by a lame-duck Congress, many of whose members will want to reward campaign donors with juicy pieces of pork. Other lawmakers will see it as their last opportunity to include their pet project or tax perk, and some who won’t be accountable because they’ll be out of office in a few weeks anyway. In other words, it’ll be less a stimulus than a Christmas Tree.
Instead of this, Congress should do just one thing when it returns right after Election Day: Extend unemployment benefits.
That would do some good for the folks involved and almost immediately go right back into the economy.
Agree. It’s a no brainer. But it’s the one thing the Dems, try as they might, can’t extract from the Bush WH. And with the Lame Duck Senate, there’s not going to be a veto override. So the House initiative gets bottled up by McConnell because no one has wanted a meaningless cloture fight.
Although we need a stimulus now, I’m reaching the point that I’d rather see no stimulus than the sort of big price-tag, half-assed, lousy grab bag we’re likely to get in November. Though we need to deficit spend in a big way (counter-cyclical and all that in what looks to be a long and deep global recession), with the US becoming a major debtor country, there’s ultimately a limit on how much we can borrow. So we need to get the most bang for the buck. Wait till January and then do a bigger, better targeted bill that’s more coherent with future fiscal priorities of the new administration.