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OK Senators. Pass. The Damn. Bill.The Senate can, and should, make minor improvements to the stimulus bill. Restoring the contraception funding would be one good move, as would upping some of the obvious wins in education funding - for example, grants for nursing and other forms of medical study would improve the supply of doctors, nurses, and medical technologists, right at the time when we admit that we need more of them. However, for all of the many imperfections of this stimulus bill, it has reached "the best deal we are going to get" stage. It's wrong, and therefore, cannot afford to be late. There are better ideas that could be put in place. For example the "middle class tax cut" is a rather poor idea, but it is the President's poor idea. The corporate tax cuts don't generate incremental investment, but there are enough conservative Democrats that it is unlikely to survive without them. Repealing large chunks of the odious bankruptcy law would be helpful, and reducing the incentive of companies to liquidate would be down right smart. But these are also, off the table. More over, the Republicans now can do what they do best: lie based on fear and pseudo-principles of so-called "conservatism." Suddenly deficits matter. No one could have foreseen that. Allowing them to stay in attack mode and scream about good ideas that make the anti-sex crowd psuedo-outraged costs political capital. This is stupid, but Americans are still waking up from a long stupor. One could improve this bill in a hundred ways, but we don't have a hundred days to pass this one bill. At this point Admiral Farragut is the best political guide: damn the torpedoes, full speed ahead. Right now if one runs the numbers on it, without running to the back of the envelope at convenient moments, it generated roughly 2.5 to 3 million jobs. Probably on the low end of that because of delays in getting money in, boil away from tax cuts - not properly accounted for in the FRB model, which admittedly missed the "job loss recovery" effect from the last times, and needs a statistical overhaul on the value of tax cuts - but this is a great deal better than a job economy in free fall. Over the last half century, there is a very high correlation between the headline U-1 unemployment rate and the NBER declaring a recession. This means that until the unemployment rate stops it's free fall, we will likely remain in a declared recession, with all of the negative consequences that this entails for businesses with holding investment, cutting positions and so on. The stimulus in the bill will prevent thousands of lay offs at the state level, and move forward with vital projects at the time we should be doing them any way. One take away from this is that the Federal Government should be doing economic planning for both booms and busts: have lists of projects that can be moved during recessions. There is about 85 Billion dollars of head room for Senate priorities. The best thing to do would be to allocate about 1 billion dollars per Democratic Senator, and about 2 billion dollars per Republican vote needed. Caucus with a filibuster proof majority, inviting in Republicans who are willing to be reasonable, and then pass the bill, overcoming unanimous consent if need be. It is a bad bill, but it is better than nothing, and nothing better will come out of this legislative process. Stirling Newberry January 29, 2009 - 8:01pm
( categories: Economics: USA )
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