Economic Stimulus Packages should have . . .
Hat tip to our good friends at Liberal Oasis for pointing us to this great article.
The broad point - as true today as in 2001 when Bush was pushing for his first round of no millionaire left behind tax cuts - is that economic stimulus from the government should to contain 5 primary components. Tax cuts for the wealthy and on capital gains are ineffective for the simple reason that they don’t take effect for months.Â
There are five components of an effective stimulus package:
1. A stimulus package should generate growth and jobs to offset rising unemployment.
2. A stimulus package should take effect quickly
3. A stimulus package should raise current deficits but not affect the long-term budget outlook.
4. A stimulus package should target unmet needs.
5. A stimulus package should be fair.
As a general policy, I’m a big fan of proactive federal action to head off a severe recession. It seems likely we are already in a recession (looking back I’m guessing we’ll determine it started sometime in November), so the faster the action, the more targeted to low and middle income persons, the more designed to stimulate consumer demand, the more effective any package will be.
