Revision of economy booster from January 13, 2008 - 3:47pm

The revisions let you track differences between multiple versions of a post.

You are currently viewing a revision of this post created on 11/16/2008 - 8:15pm by talker.

With economists increasingly leery a recession is on the horizon, DC is beginning to talk "stimulus" language to give the economy a little pre-emptive boost. Not all economists and policy advisors agree if/when a stimulus package would be necessary and there are also different schools of thought on what are the best ways to inject energy back into the US economy.

Congress and the president may be proposing a joint stimulus packages in late January. For the time being, here are a couple of ways they may go:

Supply Side

Some Republicans think a sure bet is to give businesses a leg up by cutting down corporate taxes - either whole sale or targetted toward investment.

Demand Side

Both parties are talking about tax cuts - or other forms of cash - to consumers (like you and me), but they don't necessarily share views on how or who to give those cuts to.

  • Everyone gets a rebate: As in 2001, the government could send everyone a rebate check to get more spending cash in our pockets.
  • Targetted to low and middle class families: Some economists argue that you get the biggest bang for your tax cut buck by focusing on poorer Americans who are more likely to spend any extra cash immediately, rather than put some away for retirement (could come in the form of a tax rebate or a short term cut to payroll taxes).
  • Other benefits: similar to tax cuts for the under-wealthy, extending or enlarging benefits - for unemployment, "trade adjustment assistance," or food stamps - also gets spending money into the hands of people ready to spend it. There's growing talk of "wage insurance" programs that would supplement some income for downsized workers who have to take a major paycut.

Public-works Side

A third way to go is to invest a lot of cash into building infrastructure - roads, airports, etc. - which has the double advantage of creating jobs in the short term and investing in future business (which benefits from a strong infrastructure).

How much are we talking here?

Of course, you never know until the law is passed and the checks are drawn, but there's talk of DC putting up $100 billion with economists saying anywhere from $75 - $250 billion is need to jump start the economy.

We didn't make this up: We just stole it from NYT, NYT

 

Posted In

Post new comment

The content of this field is kept private and will not be shown publicly.