Looks like JE's plan hits all the major points. :)
Criteria for an effective stimulus plan
There is always debate over what an effective stimulus package should look like. Many different policies are purported to stimulate the economy, but it is important to distinguish between those that will have their effect in the very near-term to offset rising unemployment this year and those policies that have longer-term effects. Any useful stimulus package should strengthen the recovery immediately and create more jobs in 2008. Some obvious examples of policies that fail this criterion are the ones just suggested by the Bush administration, including eliminating the estate tax and extending the high-end income, capital gains, and dividend tax cuts beyond 2010. These policies have nothing to do with the job creation we will need in 2008.
An effective, appropriate stimulus package should meet the following five criteria:
1. A stimulus package should generate growth and jobs to offset rising unemployment. The point of stimulus is to increase economic growth and thereby generate more jobs. The reason that employment growth is slowing and unemployment is rising (and will continue to do so) is that there is a shortage of demand for goods and services: we will have the capacity to produce much more than we will be consuming, and what is missing are customers able and confident enough to make expenditures.
2. A stimulus package should take effect quickly. The most frequently cited potential downside of stimulating demand through government spending is a concern that the spending will not yield economic activity quickly because of bureaucratic delay. A smart stimulus—such as the one proposed here—would have its impact within the next year. Ideally, an effective package would have some components that have immediate effect and others that might have impact in six months to a year, thus ensuring a solid foundation for the recovery. Without a stimulus, unemployment—now at 5.0%, half a percent higher than in the spring of 2007—would likely rise throughout 2008, reaching around 5.5% by July, and 6.0% by the end of the year.
3. A stimulus package should raise current deficits but not affect the long-term budget outlook. The purpose of any good stimulus package is to boost immediate job growth. For this purpose we need one-time measures that, if the recession deepens, can be extended as necessary. Permanent, ongoing measures that will affect the budget two or three years from now are, in most cases, inappropriate.7 Simply put, any stimulus proposal involving tax cuts and "pump-priming" expenditures must employ one-time, temporary measures. On the other hand, a deficit-neutral stimulus package is an oxymoron: if the plan does not raise the near-term fiscal deficit, then it has not expanded net expenditures in the economy and will not lead to new jobs.
4. A stimulus package should target unmet needs. Another goal of any good stimulus plan should be to meet, where possible, unmet social needs. For instance, it is widely acknowledged that there is a huge backlog of necessary school and bridge repairs and new construction projects. A temporary spending increase for such infrastructure would be doubly beneficial in that it would meet the other criteria listed above but also address an acknowledged, pre-existing need. Other examples could include funding needed sewage-treatment plant construction or making public facilities energy efficient.
5. A stimulus package should be fair. The distribution of wages, income, and wealth in the United States has become vastly more unequal over the last 30 years. In fact, this country has a more unequal distribution of income than any other advanced country. Therefore, a criterion for favoring one stimulus plan over another should be that the plan avoids exacerbating income inequality and, wherever possible, acts to lessen current inequalities. A temporary increase in federal revenue-sharing with the states, for example, would fulfill this criterion well by helping preserve public school spending, Medicaid for low-income families and low-income elderly in nursing homes, and other state programs that could face cutbacks due to state fiscal crises.
lots, lots more...
http://www.epi.org/content.cfm/bp210