On the Need for More Stimulus
Do we need a second stimulus? Bruce Bartlett says not yet. Paul Krugman says yes. Donald Marron reminds us how to count to three. For my two cents (before multipliers, that is), the word stimulus is completely unhelpful -- it has come to mean spending money we don't have on stuff we don't need, just for the sake of spending it "quickly." From December of last year:
If I had my druthers, the word "stimulus" would be expunged from public discussion, along with "bailout" and "rescue." These words convey the idea that, because we have so mismanaged our economic and financial affairs, we are somehow able or entitled to conjure up additional funds out of thin air to fix our problems.
I think we are now 18 months behind where we should be in moving forward with sensible government spending plans. We should have pulled the fiscal policy ripcord in January 2008 with a public investment plan designed to repair our aging infrastructure. I'd rather have the 18 months back -- as would the millions of unemployed workers who could have been collecting a paycheck if we had started sooner -- but the proper course of action today is the same as it was then.