By Brad on Jan 20, 2009 in America, Economy, Federal Government, Obama Administration, Worth Considering | comments(0)
Via Daily Dish, Macroeconomic Advisers looks at Obama’s stimulus plan:
According to press reports, President-elect Obama is preparing a stimulus plan that, excluding interest on the additional government debt, will cost roughly $775 billion over two years and includes a mix of increases in direct federal spending, aid to the states, personal tax cuts, and business tax breaks. One certainly can harbor reservations about such an aggressive set of initiatives. Can government wisely spend so much money so fast? Do elements of the stimulus plan foster the achievement of sensible long-term objectives? Is the plan fiscally responsible? Does it deliver the largest bang for the buck?
On balance, however, we find such a policy could deliver the results promised for it.
Most of elements of the plan under discussion would be temporary, thereby limiting the ongoing cost of any the package. This strikes us as a reasonable balance between the needs for near-term stimulus, on the one hand, and long-term budget discipline, on the other. Further-more, the induced rise in revenues will cover roughly 40% of the static cost of the plan over a five-year budget window. Our analysis suggests that implementation of the plan would reduce the peak unemployment rate by more than 11⁄2 percentage points, speed the economy’s return to full employment, and reduce the risks of deflation. The plan would generate more stimulus (and more induced revenues) if it was less weighted towards corporate tax breaks for past activity, but this may the price of building the broad coalition of political support necessary to see the plan become law.
By Brad on Oct 9, 2008 in America, Politics, Quoteworthy, Things That Make You Shake Your Head, Worth Considering | comments(0)
Economist Brad Delong sums up the plan:
The McCain plan is:
- Take $300 billion.
- Pay double current market value to banks that have troubled mortgages on their books, thus:
- Give a present of $100 billion to the bankers who made the loans.
- Acquire and regularize the mortgages of only two-thirds as many homeowners as could have been accomplished if the $300 billion were invested wisely.
There’s a big difference here: Democrats want to prevent depression and support the financial markets by investing taxpayer money in banks with troubled assets. Republicans want to give taxpayers money away to the shareholders and managers of banks with troubled assets.
I would say that this is unbelievable, but I do believe it.
Conservative columnist Michelle Malkin lamblasts the plan:
He spent the entire debate assailing massive government spending — while his featured proposal of the night was to heap on more massive government spending to pursue home ownership/retention at all costs. If Obama had proposed this, the Right would be screaming bloody murder about this socialist grab to have the Treasury Department renegotiate individual home loans and become chief principal write-down agents for the nation.
Political writer Matt Cooper summed it up this way:
Since maybe as many as 40 percent of the homes in America may be under water–that is, the mortgage is worth more than the home–that’s quite a tall order, one that makes the $700 billion bailout/rescue plan look like bubkes. It’s a stunning nationalization of mortgages, wild in its cost and implications and somewhat bizarre coming from someone who had tried to pare back Fannie Mae and Freddie Mac. I suspect in the coming days McCain will dial back the plan because it was so outlandishly expensive and such a federal intrusion into the market–not that we’re still worrying about that.
What it shows is that McCain isn’t too old to be president; he’s offering a lot of evidence that he’s too adolescent. He’s impetuous, imprudent. This latest proposal is as wild as the debate-canceling threat from a couple of weeks ago. I think we’re getting a vision of the McCain presidency that’s akin to Elvis firing up the Lisa Marie and taking his posse cross country for peanut butter and banana sandwiches. Every week would be an adventure.
I think we’ve had enough “adolescent,” “impetuous,” “imprudent” adventures for awhile. Given the fact that everything is tanking, we need some grown-up, well-reasoned, steady leadership. Based off the way he has run his campaign and some of the things he has said and done in the last couple of months, there can be little doubt that John McCain is not what we need.
