I know my readers (both of you) are now tired of stimulus discussion, but I'm not. So on we go.
Arnold Kling juxtaposes the famous Larry Summers dictum that fiscal stimulus should be "timely, targeted, and temporary" with a description of the current stimulus efforts: partisan, pandering, and permanent. He channels sources indicating that (1) the unemployment we're facing is in sectors that won't really be affected by the stimulus bill; (2) though he doesn't use the word, political capture will ensure that the spending increases are permanent, and (3) the government will now have dramatically increased involvement in education.
James Hamilton says that no lawmaker should vote yes on a bill they haven't read. The current stimulus bill is 647 pages (I think his econometrics textbook is about the same length). Hamilton proposes an alternative bill, two paragraphs long, which simply gives money to states.
In FT (remember it's free, just sign up), Jeff Sachs opines:
The US debate over the fiscal stimulus is remarkable in its neglect of the medium term – that is, the budgetary challenges over a period of five to 10 years. Neither the White House nor Congress has offered the public a scenario of how the proposed mega-deficits will affect the budget and government programmes beyond the next 12 to 24 months. Without a sound medium-term fiscal framework, the stimulus package can easily do more harm than good, since the prospect of trillion-dollar-plus deficits as far as the eye can see will weigh heavily on the confidence of consumers and businesses, and thereby undermine even the short-term benefits of the stimulus package. . .
What we need is a medium-term fiscal framework, one that lays out an anticipated schedule of taxes and spending consistent with the needs of the economy and government functions. Rather than soundbites about ending pork-barrel projects or scouring the budget for waste, or about the relative multipliers of tax cuts versus spending increases (both of which depend on expectations about the future, a point mostly overlooked in the debate), we should be reflecting on certain basic fiscal facts, the most important of which is that the US government faces huge and potentially debilitating structural deficits as far as the eye can see.
Lest you think it's all negative, Angry Bear describes the economics profession as being divided between freshwater and saltwater economists. He argues that the freshwater group (think laissez-faire) is noncredible. Keep in mind, however, that he lists among the saltwater economists Greg Mankiw, a moderate stimulus skeptic.
Finally, the NYT econ guy David Leonhardt:
First of all, the package really is stimulus. It will quickly give money to the people who have been hardest hit by the recession and who, not coincidentally, will be most likely to spend that money soon.
This is a funny claim to make so cavalierly, considering the huge debate surrounding the stimulus (proof by deity, I guess, since it's Obama's plan). But then again, the NY Times is not famous for its unbiased political credibility.
