Trimmer Stimulus Bill

OK I am getting really tired of repeating this: a ‘trimmer’ stimulus package is a bad stimulus package. What part of this is hard to understand? Instead we get silly articles like this one in this morning’s New York Times: Details Emerge of a Trimmer Stimulus Bill

The gist of this seems to be that there is a modest triumph in slimming the proposal down in order to get ‘bipartisan’ support.

Frankly that’s vacuous and irrelevant.

First: who cares about bipartisan? Politics is inherently a debate. Finding common ground invariably means watering something down. This is touted as being a ‘good thing’ as if holding a strong position were unseemly or bad. But our circumstance now are largely binary. There is a right way and a wrong way to go about getting the economy growing. Searching for consensus runs the risk of fudging and making things worse.

A case in point: cutting the aid to states earmarked for education, is a big mistake. It is being heralded by our ‘centrists’ as a win for bipartisanship. I see it as bad policy. We need to pump money into our failing states. Their budgets are in deplorable condition. They are cutting budgets just when we need to spend more. Helping them spend is sound expenditure. If this is an example of bipartisanship then sign me up for something else.

Second: the proposal was too small to begin with. Cutting it is horrible. This is not the time for Congress to find a sudden urge for fiscal restraint. Now is the time to go hog wild and spend like crazy. Fiscal restraint was appropriate in 2001 or 2003, but instead we were given irresponsible tax cuts.

The shortfall in demand looks as if it will be $1 trillion both this year and next. Even with healthy multipliers a $789 billion package is small when set against the task at hand. It condemns us almost certainly to need another stimulus package next spring. Why wait until then?

So, repeat after me: a bigger stimulus is a better stimulus.

Sheesh!