Highlights of the economic stimulus plan:

[xiphias]

Looking over the AP's summary of the Obama economic stimulus plan, I see lots and lots of good things that are overdue to be done.

But I'm not clear on how any of them will actually stimulate the economy.

Comments

[quietann.livejournal.com]

That was my general problem with it, too.

There was a fairly conservative economist on NPR a few days ago. He said we need a stimulus package, and he's normally a "no new taxes/free market" kind of guy. BUT he had a number of good ideas for actually *stimulating* the economy. Like, if you own a home, give a tax credit for home improvements... because you have to buy stuff to do it.

[burgundy.livejournal.com]

Anything that puts money in the hands of people who will spend it will have some stimulating effect. You can argue over which will have greater effects (for example, poor people will spend a higher percentage of any money they get than will rich people), but that's the heart of it.

Do you have a link to the particular summary you're reading, or specific things you're dubious about?

[xiphias.livejournal.com]

http://www.google.com/hostednews/ap/article/ALeqM5j1ydWbHEuj-hf2J1jpowpY1jO5awD960DPU01

I'm not really dubious about any of them. All the spendy things are things that need to be done, and need to be done yesterday.

And most of the tax-cutty things are actually reasonably sensible things -- let computers depreciate faster, for instance, because, well, computers DO depreciate faster. Increase the earned income tax credit. Stuff like that.

But I can't see how any of this stuff is going to help the economy in the way that I think it needs to be helped.

[burgundy.livejournal.com]

How do you think it needs to be helped?

[xiphias.livejournal.com]

I think that the most important thing is creating more jobs.

Unemployment beneft extension are good, and necessary. Job training? Well, it's a good thing, but it only helps if there are jobs to be trained for.

COBRA benefit extensions are a good thing, but, again, don't get people back to work, although they do allow people to survive while they are out of work. The rest of the health care stuff isn't going to have any statistically significant effect on job creation. I guess some researchers will have jobs they wouldn't otherwise have, and that's good, and the things they'll be researching ought to be reasearched, but it doesn't do much for job creation.

The infrastructure stuff is really the point where I DO see some stuff that will help. Building and repairing bridges, highways, and government buildings are labor-intensive tasks, and that's a good thing. But I don't know if that's enough, and it doesn't so much trigger any other growth, not directly (although not having working bridges and highways will certainly stunt growth . . .)

What would I have wanted to see? I'm not really sure; I'm no economist. But I was thinking of things like government loan guarantees for starting up businesses and the like.

[burgundy.livejournal.com]

Some of it might be meant as loss-prevention rather than growth-promoting (like, if you have a lot of people unemployed and uninsured, they can't get health are, which jeopardizes the positions of health-care workers, plus of course there are great public health benefits to keeping people healthy). And they've also said that some of this is long-term rather than short-term, to shore things up in the future. That could very well be code for "we really really wanted extra health care spending, so we'll stick it into this bill."

I have studied economics a little bit but micro rather than macro, and I have a hard time with things like financial markets, but I wonder how things like loan guarantees would work with the banks still sitting on money and not extending credit. We really, really need to unfreeze credit.

[ron_newman]

One way to help re-balance the budget would be to close all overseas military bases and bring all US troops home from all foreign countries (yes, that includes Afghanistan). Stop trying to be a Great Power. Be more like Canada, or Finland, or Denmark, or the Netherlands.

[holzman.livejournal.com]

Several things are going on.

Anything that puts more money into the hands of middle-class and poor Americans will stimulate the economy because those people will spend that money. If people are in a position to spend money, people are in a position to give them something to spend it on, which means jobs, which puts money into people's hands to spend. Lather, rinse, repeat.

COBRA benefits don't only help people survive while they're out of work, they maintain continual insurance -- which is vital to people who would otherwise become uninsurable because of preexisting medical conditions. People who can't get insurance either don't get health care, or get their health care at the ER. Reactive health care is expensive helathcve health care. That's money people don't have on hand to spend on things that create jobs.

Improved infrastructure stimulates job growth by extending the range that one can look for work without having to relocate. It's beyond the scope of this plan, but if I could take a mag-lev train to get to work, I can look for jobs in a 300 mile radius instead of a 50 mile radius.

[xiphias.livejournal.com]

I wonder how things like loan guarantees would work with the banks still sitting on money and not extending credit. We really, really need to unfreeze credit.

I totally agree. That's what I'd hope that loan guarantees would help with.

[xiphias.livejournal.com]

The thing is . . . Canada, Finland, Denmark, and the Netherlands can do that because someone else isn't doing that.

Now, I don't feel any great need that the United States is said entity -- but until, say, the European Union can step up and do it, it'd be pretty serious to stop.

. . . and Canada has a lot of troops in various places all over the world, too, actually.

[ron_newman]

Does it need to be done at all? I actually think the world would be a better place without imperialism.

[xiphias.livejournal.com]

In the short term, yes. The world would be a better place without imperialism, but just removing troops wouldn't make it a world without imperialism -- it'd just make a vacuum in which someone else would become imperialist.

Probably Vladimir Putin.

[sethg]

I think Obama is operating under two very big constraints:

(1) The government needs to spend money on things that will stimulate the economy right now, rather than programs that might take six to nine months of planning before they can ramp up to actually having a stimulative effect.

(2) Obama wants a bill that can pass soon, which means that he can't afford to spend time convincing wavering Congresscritters that the bill as a whole really is a good idea and even though it doesn't support popular program X, it supports program Y which is even better.