Will the stimulus actually stimulate? Economists say no

[Mr. Sparkle]

McClatchy Washington Bureau

Posted on Thu, Feb. 12, 2009
Will the stimulus actually stimulate? Economists say no
Kevin G. Hall | McClatchy Newspapers

last updated: February 12, 2009 11:35:55 PM

WASHINGTON — The compromise economic stimulus plan agreed to by negotiators from the House of Representatives and the Senate is short on incentives to get consumers spending again and long on social goals that won't stimulate economic activity, according to a range of respected economists.

"I think (doing) nothing would have been better," said Ed Yardeni, an investment analyst who's usually an optimist, in an interview with McClatchy. He argued that the plan fails to provide the right incentives to spur spending.

"It's unfocused. That is my problem. It is a lot of money for a lot of nickel-and- dime programs. I would have rather had a lot of money for (promoting purchase of) housing and autos . . . . Most of this plan is really, I think, aimed at stabilizing the situation and helping people get through the recession, rather than getting us out of the recession. They are actually providing less short-term stimulus by cutting back, from what I understand, some of the tax credits."

House and Senate negotiators this week narrowed the differences between their competing stimulus plans. In so doing, they scrapped a large tax credit for buying automobiles that would've caused positive ripple effects across the manufacturing sector. They settled instead on letting purchasers of new vehicles deduct from their federal taxes the state and local sales taxes on the cars they bought.

"All this is 25 years of government expansion jammed into one bill and sold as stimulus," said Brian Riedl, the director of budget analysis for the Heritage Foundation, a conservative policy research group.

The president of the U.S. Chamber of Commerce, in a speech in Detroit Thursday, tried to put a brave face on the tough year ahead. Thomas Donohue acknowledged that big business didn't get in the stimulus bill some of the tax-relief measures it most wanted, but promised the Chamber's support.

"The bottom line is that at the end of the day, we're going to support the legislation. Why? Because with the markets functioning so poorly, the government is the only game in town capable of jump-starting the economy," Donohue said.

http://www.mcclatchydc.com/227/story/62082.html


Up until I read this article, all the Economists I have read said the Stimulus bill is badly needed and will work. The main protagonists in this article is an investment analyst (not economist) and a hack from the Heritage Foundation(one of the biggest supporters of the Iraq war, denies global climate change and is part of the base of the American Taliban/Gop party).

Someone should tell Kevin G. Hall that's it is a stimulus bill for MAIN Street and not WALL Street. I used to think Mcclatchy was a good reputable news source, but i'm not so sure anymore .

[sandnsea]

1. I think Mcclatchy was sold

in the last year or two, wasn't it?

It is annoying that they print this crap without any context as to who is making these claims or what their political philosophy is. They certainly make no bones when they quote a liberal.

[Cleita]

2. I was thinking what I was going to do with my $400 and I realized that

all I'm going to do with it is pay down a credit card. I think a lot of people will be doing the same thing. I can't understand why they put so much into that and increasing our national debt because of it.

[The_Casual_Observer]

3. a year or two ago "Economists" were saying that globalization would prevent

an economic downturn, the price of petroleum had no effect on our now "information" based economy, and the housing market would have a soft landing.

[Bonhomme Richard]

4. "(promoting purchase of) housing and autos"

UMmmmm. You need a secure job to buy houses and auto.

[babylonsister]

5. And the other 'range of economists' have a totally different opinion.

In economics, that old expression, 'opinions are like assholes, everyone has one' certainly applies. But who knew there were so many! :crazy:

[Taverner]

6. This should be the first in a series of stimuli

Then it will work

That's what FDR did

At the least, we need a few new agencies along the lines of the CCC and TVA

How about a new bullet speed rail line from SF to NYC?

We have the tracks laid, we just have to retrofit them for bullet trains

Imagine taking a cross country journey on land in less than 12 hours?

I know a ton of people who would rather do that than fly - especially since when you factor in security, the layovers, the takeoff and landing time - it works out to be a little less than that

[On the Road]

7. For Every Two Economists, There are Three Opinions

It would be astonishing if a majority of economists lined up behind any plan.

So you have to take it with a grain of salt whenever a leading economist publicly disagrees with the stimulus or any other economic proposal.

McClatchy may turn out to be right that the bill will not restart the economy. However, it will undoubtedly accomplish some things and put some people back to work in the meantime.

[LynnTheDem]

8. Heritage Foundation; spreading rightwingnut misinformation & pure bullshit

one rightwingnut at a time.