A new column for the Financial Times:
In a sudden and doubtless temporary outbreak of willingness to co-operate, the White House and Congress, cheered on by the Federal Reserve, are working on a plan for fiscal stimulus. The effort is welcome – but the package likely to emerge will make less of a difference than the energy suddenly devoted to the topic would suggest.
A consensus has formed around the need for a temporary fiscal boost of between $50bn and $150bn (the median is still trending upward) to be delivered soon and chiefly in a form that gives cash to people (such as those on low incomes or unemployed) who will actually spend it. Congressional leaders and the administration, aiming to decide something by the State of the Union speech on January 28, are looking at tax rebates, increases in the earned income tax credit, more money for food stamps and unemployment insurance, and temporary investment incentives.
President George W. Bush is not insisting that the agreement include an extension of his earlier tax cuts, otherwise set to expire in 2010. In return congressional Democrats are suppressing their default distaste for measures to help business. With a truce declared on those contentious points, a deal can be done.
You can read the rest of the article here.
Glad to see you back. How were the Chimpanzees? (By which I mean, rather snark-ily, did you bother yourself to get any column-material from east Africa?)
Think you FT piece is worthwhile but wish you'd take a look at the US economy from a greater distance. Seems to me (a complete ignoramous r/t economics) that the US economy has tried to find more prosperity from more debt for my lifetime. Doesn't that imply many unhappy events along the future and a sad end?
Hope you enjoyed your vacation.
Posted by JohnMcC | January 21, 2008 2:29 PM