Krugman: Stimulus Gone Bad

[RamboLiberal]

House Democrats and the White House have reached an agreement on an economic stimulus plan. Unfortunately, the plan — which essentially consists of nothing but tax cuts and gives most of those tax cuts to people in fairly good financial shape — looks like a lemon.

Specifically, the Democrats appear to have buckled in the face of the Bush administration’s ideological rigidity, dropping demands for provisions that would have helped those most in need. And those happen to be the same provisions that might actually have made the stimulus plan effective.

Those are harsh words, so let me explain what’s going on.

Aside from business tax breaks — which are an unhappy story for another column — the plan gives each worker making less than $75,000 a $300 check, plus additional amounts to people who make enough to pay substantial sums in income tax. This ensures that the bulk of the money would go to people who are doing O.K. financially — which misses the whole point.

The goal of a stimulus plan should be to support overall spending, so as to avert or limit the depth of a recession. If the money the government lays out doesn’t get spent — if it just gets added to people’s bank accounts or used to pay off debts — the plan will have failed.

http://www.nytimes.com/2008/01/25/opinion/25krugman.html?ref=opinion

[BarackBucks]

1. I make about $25,000

How much will I get and when will I get it?

[lumberjack_jeff]

9. About $300 and too late to do any good.

Unfortunately, there's never a deadline for doing bad.

[Lasher]

2. How predictable.

Democrats set a new speed record for caving in. This is just more tax cuts for rich people.

[tom_paine]

3. Predictably, the Democratic Leadership caved on everything.

We the People have no representation in the Imperial Government. None.

Nancu pelosi probably didn;t mind selling out those "vagrants with their Impeah Bush t-shirts".

Not as good as getting them arrested, but still satisfying to make sure those Filthy Little Nobodies get no help.

Nancy pelosi is a disgrace, plain and simple. But then, of the entire Democratic Congress, there may be two or three dozen total that are not disgraces.

I used to ask, how is it possible that Bushler rules as if he has a 95% approval rating when he is the most hated Ruler America has ever had?

I don't ask that any more. We are betrayed by BOTH sides.

[NoFederales]

8. A lesson too many overlook far too often. nt

NoFederales

[ixion]

11. We are betrayed by BOTH sides.

exactly. And further, BOTH sides consider We, the People to be terrorists, hence all the bogus legislation that does nothing to actually stop acts of terrorism, but makes like miserable for supposedly 'free' citizens.

[Hardrada]

4. This must be the economic version of The Surge!

Desperate quick-fix solutions which manage to be contemptible, deceptive and vicious all at the same time.

[David__77]

5. I don't see it as totally bad.

There are two good points:

Those who didn't pay taxes but worked will get funds.
Those who make more than 75,000 won't get anything.

I don't think that if the GOP controlled congress you'd see these two components.

[Doctor_J]

6. Why should we believe a Nobel-level economist, when a Harvard MBA (ROFL)

tells us this is just what we need?

:eyes:

[Doctor_J]

7. The subtext here is that there is no urgent stimulus to vote Dem this fall

since it will just be more of the same anyway.

[lumberjack_jeff]

10. The instant that economists started talking about stimulus...

... it got turned into tax cuts in DC. Pandering to crybaby taxpayers is the only language they know.

As usual, Krugman got it exactly right.