http://www.nytimes.com/2009/01/12/opinion/12krugman.html?hpKrugman: Ideas for Obama
"Last week President-elect Barack Obama was asked to respond to critics who say that his stimulus plan won’t do enough to help the economy. Mr. Obama answered that he wants to hear ideas about “how to spend money efficiently and effectively to jump-start the economy.” O.K., I’ll bite — although as I’ll explain shortly, the “jump-start” metaphor is part of the problem."
On Saturday, Christina Romer, the future head of the Council of Economic Advisers, and Jared Bernstein, who will be the vice president’s chief economist, released estimates of what the Obama economic plan would accomplish. Their report is reasonable and intellectually honest, which is a welcome change from the fuzzy math of the last eight years.
But the report also makes it clear that the plan falls well short of what the economy needs.
If Mr. Obama drops the “jump-start” metaphor, if he accepts the reality that we need a multi-year program rather than a short burst of activity, he can create a lot more jobs through government investment, even in the near term.
So my advice to the Obama team is to scrap the business tax cuts, and, more important, to deal with the threat of doing too little by doing more. And the way to do more is to stop talking about jump-starts and look more broadly at the possibilities for government investment.
Krugman says he should dump the $150 million in business tax cuts and use that money for unemployment aid, medicaid and health insurance. I think he is right there. It's gonna be interesting to watch the open-air evolution of this stimulus plan.
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