With all due respect to Mankiw's "Let States decide" what kind of stimulus they get (which seems to me would be a political nightmare for numerous Governors, many of which may be new to office by the time the stimulus passes), there is good reason to favor direct spending such as via infrastructure a la a "New" New Deal as opposed to further tax rebates.
Firstly, there is significant evidence that consumers and firms are saving good chunks of their income due to the uncertainty of the market. In so far as that money is hoarded or used to pay off bad or old debt, then a rebate will do little to stimulate new investment and consumption. In so far that it is thrust into the financial sector via the purchase of bonds or stock etc., there is good chance that the money would be 'tied up' with the rest of the money that banks refuse to lend. It is true that lending is loosening, but it is still a problem.
No, the only way to guarantee an actual stimulus in this climate is through direct spending. Cut out the financial intermediaries and eliminate the potential for leakages and directly pump money into new investment projects - investment projects that sadly have been crowded out over the course of a number of decades due to the massive expense for the sake of "national defense" (or offense, as the case may be).
4 comments:
very interesting. any thoughts on direct spending on environmental/climate technologies?
Of course that is the downside to spending - deciding what to spend it on. Spending attracts lobbying and interest groups. Personally, I think one of the first things an Obama administration should do is focus on his plan to add up to 5 million 'green' jobs via new 'green' projects backed by the government. This kills many birds with one stone: economy, environment, social cohesion, dependency on oil, etc.
Hi !.
might , perhaps very interested to know how one can manage to receive high yields .
There is no initial capital needed You may begin earning with as small sum of money as 20-100 dollars.
AimTrust is what you haven`t ever dreamt of such a chance to become rich
The firm incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.
Its head office is in Panama with offices everywhere: In USA, Canada, Cyprus.
Do you want to become a happy investor?
That`s your choice That`s what you desire!
I feel good, I began to get real money with the help of this company,
and I invite you to do the same. It`s all about how to choose a correct partner who uses your savings in a right way - that`s the AimTrust!.
I make 2G daily, and my first investment was 500 dollars only!
It`s easy to start , just click this link http://sopigyse.maddsites.com/inatos.html
and go! Let`s take our chance together to become rich
Hi !.
You may , probably very interested to know how one can manage to receive high yields .
There is no initial capital needed You may commense earning with as small sum of money as 20-100 dollars.
AimTrust is what you thought of all the time
The company represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.
Its head office is in Panama with structures around the world.
Do you want to become a happy investor?
That`s your choice That`s what you wish in the long run!
I feel good, I started to take up income with the help of this company,
and I invite you to do the same. If it gets down to select a correct companion who uses your money in a right way - that`s AimTrust!.
I earn US$2,000 per day, and my first investment was 500 dollars only!
It`s easy to get involved , just click this link http://edyporukyf.mindnmagick.com/xuwypyw.html
and lucky you`re! Let`s take this option together to get rid of nastiness of the life
Post a Comment