Ryan Avent says that my claim that the stimulus won't work unless we fix the banking system is "flatly untrue".  Okay, for some value of the word "work" he's right--the government will spend the money.  It will be spent.

But the stimulus is being sold, at least to us econobloggers, on the multipler.  What's the multiplier on spending or tax refunds in a system where the marginal propensity to save is rapidly rising, and the banks aren't lending?  What's the multiplier on future spending when the relevant companies are capital constrained?

Given that the standard model of the Great Depression has the FDIC and the fixes to the banking system playing a vastly more important role than any FDR spending program, I'd say that the liberal econobloggers bear the burden of proof that fixing the banks is NOT vastly more important than whizzing through green energy spending at the lowest possible level of scrutiny.

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.