Friday, February 06, 2009


Steven Pearlstein writes in the WaPo that many in Congress (Republicans) need personal economic trainers; they would fail Economics 101. He provides a metric for measuring stimulus items:
Spending is stimulus, no matter what it's for and who does it. The best spending is that which creates jobs and economic activity now, has big payoffs later and disappears from future budgets.


Corporate tax cuts, for instance, have a multiplier effect of between 1 and 0.7, and does not disappear from future budgets, unless the tax cuts are repealed. Food stamps, we are told, have a multiplier effect of 1.5 or so; and will decrease if the economy improves.