Thursday, January 24, 2008

Stimulus Package

. Thursday, January 24, 2008

Congress and the administration reached agreement on fiscal stimulus. Paulson's comments in the announcement of the agreement indicates partly why this may offer much in the way of quick relief. "If all works well," he expects the rebates to begin flowing in May. He said the aim is to start sending the checks within 60 days of enactment of the stimulus package, with most recipients receiving their checks in less than 10 weeks.

There has been considerable chatter about whether a fiscal stimulus is a) necessary and b) likely to work. The balance of commentary by macroeconomists seems to be a double no. See, for example,
Mankiw, and Brad DeLong. Of quite different ideological stripes, from conservative (Mankiw) to to DeLong a moderate liberal, and yet, similar conclusions: not time yet--let monetary policy do its job and then use fiscal policy. DeLong's video is worth watching, if only for its somewhat fascinating dorky-intellectual-oddness.

Krugman (the columnist, not the economist) demurs.

It is hard to argue with DeLong's conclusion (which I think I anticipated): "John Edwards and Hillary Rodham Clinton might respond that these stimulus packages are political rather than policy documents--acts of campaigning rather than acts of governance--and they are right, up to a point."

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Stimulus Package
 

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