The Case for Another Stimulus

The unemployment rate is higher than the Administration forecast.  From a Keynesian perspective, this suggests that the need for a stimulus is even greater than when President Obama took office.


I would score one point for those of us who argued for a stimulus that takes effect in 2009 rather than in 2010 and beyond.  We could still do that, by enacting a payroll tax cut, effective immediately.

However, if a "second stimulus" means piling on more spending in 2011 and beyond, that might prove counterproductive by raising interest rates and depressing the economy in the short run.

Presented by

Arnold Kling

Arnold Kling earned his Ph.D in economics at MIT. He was an economist on the staff of the Federal Reserve Board. From 1986-1994 he worked at Freddie Mac. He started Homefair.com in 1994 and sold it in 1999. His fourth book, From Poverty to Prosperity, co-authored with Nick Schulz, is due out in April of 2009. He blogs regularly at Econlog.

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