It's been hard to post about the stimulus package as the target has been moving, but a few thoughts have popped up.
- It may just be my perception, but the folks who are not crazy about stimulus spending compared to tax cuts have a large overlap with folks who say Americans need to save more. Isn't this counterproductive or mildly hypocritical? The only thing worse than poorly spent stimulus money is unspent stimulus money. A tax cut right now would, like the last stimulus effort, likely be mostly tucked away in anxious consumer savings or paying down debt, I think. In essence, tax-cutters are counting on consumers' ignoring their own counsel. In fact, ask yourself what you would do with an extra $1000.
- Looking at results from previous recessions is perfectly valid, but isn't is also possible the consumer response to a tax cut will be different due to the much deeper current of fear around the world right now? With an entire globe nervous and countries - not just companies - failing, I know I am more concerned about this recession than previous downturns in my experience.
- Calling everything except tax cuts "pork" isn't helpful. And even pork isn't pork if it's your pork. A significant portion of the stimulus is transfer payments to mitigate the effects of unemployment: extended unemployment benefits, food stamps, etc. Even economists who think government spending to revive consumption a bad idea don't oppose these payments.
- Suddenly a mystery of how Pres. Hoover so badly mismanaged his response when he was superbly qualified for the job is partially explained. The basic instinct right now to hoard and avoid debt is the same today as then.
- Although job losses are not necessarily accelerating, the social effects could as ripples of family-friend connections fan out across almost every sector. Encouraging consumption is not going to get easier, I'll bet.
- I believe the urgency of stimulus to be the lesser of two evils compared to the possibility of wasteful spending. Besides, I've always wondered if any spending - government or personal - is ever 100% efficient.
- Many who claim we are destroying the future with stimulus deficit spending could have been more useful had they spoken up meaningfully say, 8 years ago. Imagine if we still had a surplus budget instead of a six-year war to contend with.