Thursday, February 12, 2009

The Stimulus Package

The Lehmann Letter ©

It looks like the stimulus package will become law.

That’s good, because we could use some good news.

Is it ideal? No. There are more than enough critics and criticisms. But it is a start and, more important, it’s the best that could be done under the circumstances. After all, 61 votes is a slim margin in today’s Senate.

Meanwhile, here are some thoughts about some of the criticisms.

First, there’s what we will spend the money on. The conventional wisdom says infrastructure, what we used to call public works. But it really doesn’t matter, as long as it happens sooner rather than later. Spending is spending. Health care and education are just as good as roads and bridges because both create jobs. And that’s the objective. If you prefer roads and bridges to health care and education, that’s OK. But that’s not the same as saying health care and education don’t create jobs.

Second, some of the criticism is about small numbers. You may think spending money to re-sod the nation’s capital is a waste, and maybe you are right. But that was a small part of the total. As a matter of fact, if you add all the spending on the specific projects that have suffered the most ridicule, you probably won’t come up with more than a few $billion. That’s relatively little out of a $700 or $800 billion total.

Third, contrary to the critics, it really is this plan or nothing. It’s not accurate to say that there are other plans that could have been enacted that would have been more effective. They may have been more effective, but that doesn’t mean they could have been enacted. The final package was a delicate balance of competing interests and multiple compromises. There is no way some features not in the package could have replaced other features that are in the package. That would have reduced the “yes” votes and increased the “no” votes and the package would have come apart. A package deal is a package deal. It’s all or nothing. And there was no alternative package that could have garnered the necessary votes.

© 2009 Michael B. Lehmann

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