Stimulus, nothing but stimulus — and right now
THE NEWS TRIBUNE
The single most important ingredient of the economic stimulus package now before Congress is speed.
The U.S. economy may be about to tip into a recession, or the recession may already have begun. Either way, $150 billion worth of pump priming will help most if it happens sooner and least if it happens later. Getting it to the president’s desk tomorrow would not be too soon.
President George W. Bush and the Democratic leadership of the House clearly understand this. Bush and House Speaker Nancy Pelosi have already agreed on a measure that would put $100 billion directly into the pockets of American consumers and give businesses $50 billion in tax breaks for investing in job-creating plants and equipment.
It’s simple, and it promises to do the job.
The problem at the moment is the Senate, some of whose members want to use the package to advance pet causes or micromanage how the money gets spent.
Ted Kennedy, for example, wants to earmark money for heating subsidies – a program of particular benefit to his Massachusetts constituents.
Ron Wyden of Oregon wants some spent on road construction. Patty Murray wants to include summer job programs for youth. Many want to provide more food stamps to the poor and extend unemployment benefits for the jobless.
There’s a case to be made for all of the above. But the package shouldn’t be dickered to death in the Senate or turned into an omnibus, goodies-for-everyone-in-sight bill.
The purpose isn’t to expand welfare, redistribute income, build highways or help people in northern climes keep their thermostats at 70 degrees. The purpose is to jump-start the economy, pure and simple. Economic expansion benefits everyone across the board.
The best way to accomplish this is to put money in the hands of people who will spend it quickly. That argues for sending the bulk of it to the non-rich, as the Bush-Pelosi package does. But piecemealing it out to particular groups and programs would turn the bill into something other than straight digitalis and create political friction that would only slow its passage.
Markets, investment and consumer spending are driven – to a scary degree – by psychology. If most investors and consumers believe the economy about to tank, that belief alone becomes a factor helping drive a downturn.
So the perception that the nation’s leaders are actually doing something to avert recession can make a difference. A quick stimulus is what Congress can do right now. The Senate should get on board with the bipartisan bill already on the table and leave the heating subsidies, unemployment checks, etc., for another day.