erik lundegaard

Fiddling

Paul Krugman has a great piece today on — basically — arguments against Republican arguments against Obama's stimulus package. Among them:

  • First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years. It’s as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch. (The actual cost of a free school lunch, by the way, is $2.57.)
  • Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money. Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.
  • Finally, ignore anyone who tries to make something of the fact that the new administration’s chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.It’s true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn’t, because we’re in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero. That’s why we’re talking about large-scale fiscal stimulus: it’s what’s left in the policy arsenal now that the Fed has shot its bolt.

Rome is burning and the Republicans are fiddling, but it's nice to have a Nobel-Prize-winning economist on your side.


Posted at 04:13 PM on Mon. Jan 26, 2009 in category Politics, Media  
Tags:

COMMENTS

No comments yet

You may bypass the ID fields and security question below if you log in before commenting.


 
 





Receive notification of further comments via e-mail

« "Slumdog"? Final Answer   |   Home   |   The Quiz...and How Nathaniel R. Nudged Me Off the Fence »
 RSS    Facebook

Twitter: @ErikLundegaard

ARCHIVES

All previous entries

LINKS
Movies
Jeffrey Wells
The Film Experience
Roger Ebert
Baseball
Rob Neyer
Joe Posnanski
Cardboard Gods
Politics
Andrew Sullivan
Alex Pareene
Hendrik Hertzberg
Friends
Cloud Five Comics
Copy Curmudgeon
Deb Ellis
Andrew Engelson
Jerry Grillo
Tim Harrison
Eric Hanson
Ben Stocking
Jim Walsh
dative-querulous