The United States needs another stimulus bill.
American families need unemployment insurance and COBRA health benefits extended to save struggling families from bankruptcy. The state coffers need cash to save jobs, avert draconian tax increases, and keep Medicaid afloat. Schools need relief to keep the contagion of the recession out of our classrooms.
But Congress wants to do more. It wants to add a tax bennie for NASCAR track owners, and cotton shirt manufacturers, and Indian reservation property developers, and Puerto Rican rum makers. We're left with a necessary recession-year stimulus living inside an bloated election-year piñata that's practically begging critics to thwack it. And they're thwacking, alright.
The Economist takes a swing, writing:
Mr Obama's fiscal policy has been described as "gas now, brake later": wider deficits in the near term to keep the economy out of depression (which would risk even bigger deficits), followed by a switch to deficit reduction to cap the rise in the national debt. The switch, however, remains a future abstraction. The latest initiatives would bring the total amount of stimulus since Mr Obama took office to well over $1 trillion
"Does the economy need all this?" the authors ask. Well, yes. American families and businesses need quite a bit of it, and the economy has benefited from it.
The Economist knows this, and they acknowledge that giving unemployed people money and insurance is "true stimulus." But because this stimulus bill also includes special interest tax breaks, the authors use the bill as a reason to knock "Obama's fiscal policy."
That's silly. Obama's fiscal policy isn't tied up in depreciation gimmicks for NASCAR tracks. The inclusion of the special interest tax goodies in the stimulus bill has precious little to do with our larger fiscal picture. Besides, cutting the deficit with earmarks and million-dollar credits is like cutting down a tree with a nail file. But their very presence in the bill gives folks cause to call into question the administration's whole economic agenda, even if the critics actually agree with the basic high-deficits now/low-deficits later principle.
The United States needed a stimulus bill, and Congress produced a target and a touchstone for deficit critics. One hopes that jobless families that need help immediately won't suffer because of it.