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Making sense of the stimulus

The stimulus package - through the House, awaiting Senate action - isn't playing to very good reviews.

For starters, here's a critique  of the stimulus package by conservative economist Martin Feldstein. He doesn't like it, but his rationale is not knee-jerk GOP think.

The problem with the current stimulus plan is not that it is too big but that it delivers too little extra employment and income for such a large fiscal deficit.

David Brooks, another right-of-center perspective, has this to say in the New York Times.

They’ve created a sprawling, undisciplined smorgasbord, which has spun off a series of unintended consequences. First, by trying to do everything all it once, the bill does nothing well. The money spent on long-term domestic programs means there may not be enough to jolt the economy now (about $290 billion in spending is pushed off into 2011 and later). The money spent on stimulus, meanwhile, means there’s not enough to truly reform domestic programs like health technology, schools and infrastructure. The measure mostly pumps more money into old arrangements.

The Wall Street Journal details how pork has made its way into the legislation.

The economic stimulus plan could include dozens of special-interest provisions pushed by lawmakers to help constituents such as the South Florida yacht-repair industry, Manhattan subway riders and California wine makers.

President Barack Obama wanted to keep the package free of such narrow provisions, partly to hold down the cost of the plan. But the business-as-usual process for handling the legislation on Capitol Hill is swelling its price tag to nearly $900 billion and giving Mr. Obama a refresher course on the congressional sausage-making process.

Many of the special-interest projects were included in a version of the stimulus plan that passed the House on Wednesday. In the Senate, lobbying groups from the agriculture to timber industries are working with home-state senators to add their pet items to the Senate version of the bill, which is set to be debated on the floor next week.

But it's not just conservatives who are less than enthused.

This Washington Post story details how some Democrats are grumbling.

In testimony before the House Budget Committee (Tuesday), Alice M. Rivlin, who was President Bill Clinton's budget director, suggested splitting the plan, implementing its immediate stimulus components now and taking more time to plan the longer-term transformative spending to make sure it is done right.

"Such a long-term investment program should not be put together hastily and lumped in with the anti-recession package. The elements of the investment program must be carefully planned and will not create many jobs right away," said Rivlin, a fellow at the Brookings Institution. The risk, she said, is that "money will be wasted because the investment elements were not carefully crafted."

The New York Times has a couple of analytical pieces here and here. There is some qualified good news it what they have to say.

Says Times columnist David Leonhardt:

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. The spending also has a chance to do some long-term good, by paying for the computerization of medical records, the weatherization of homes and other such investments.

By my count, the current package has just one major flaw. It could do a lot more to change how the government spends its money. It doesn’t have nearly the amount of the fresh, reformist thinking as Mr. Obama’s campaign speeches and proposals did. Instead, the bill is mostly a stew of spending on existing programs, whatever their warts may be.

The Times has a topics page that's a good way of tracking developments.

Read on, Wayne. You, too, Garth.

 

 

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Economic bailout
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