Thursday, September 9, 2010

More on the fiscal stimulus

President Obama has proposed a $350 billion stimulus package. The package would jointly focus on infrastructure projects along with investment tax credits for firms. Both of these programs would provide well needed stimulus, but I high doubt a bill can get passed that is as simple as this. Earlier I said a $100 billion package would be too small and larger packages would likely not get passed. I do like how this bill focuses on upgrading the infrastructure in our country. Now why didn't the first stimulus bill do something similar? I am worried about this adding to our long-term government debt, but the longer we stay in a recession the lower tax revenues and higher government spending will continue.

Greg Mankiw does like the idea but argues we need more. Again, citing the need to convert household saving into investment.

1 comment:

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