Detachable Economic Stimulus

Today I was going to post on the cabin renovations. Instead, after a quick perusal of the discussion on the stimulus bill on The Nation site, on HBBlogs' Blue Ridge Data, and the WaPo, I am giving way to a rant.

With all this talk about the stimulus bill, I was was reminded that somewhere in the depths of history that I also took macroecomonics classes, and one of the things I learned about was the multiplier affect of government spending.

Admittedly, after 8 years of misguided and misdirected government spending, which racked up national debt at an unprecedented pace and to an unprecedented level, this kind of an approach has some risk. But something has to be done quickly - and that's one thing that seems to be the consensus in Washington today. As our friends at the Blue Ridge Data blog have noted, the stimulus is likely to require about a year to 18 months to have the full desired impact, and depending on the final approach in the package, the result could take longer.

It's one of the ironies of politics and government that the House GOP caucus, who during the Bush era bore much responsibility for the situation we are in, has now decided to vote against the stimulus package. The package was designed to include a direct approach that capitalizes on the multiplier affect of infrastructure spending to create jobs for those in need. The GOP caucus negotiated to orient it in favor of tax reductions that are less potent because they tend to benefit people who are keeping their jobs, and because the money is more often saved or used to pay down debt.

However, it's no matter to them that this was a significant change in direction, less likely to help the many and more likely to benefit the few. They then united in voting against it.

Maybe they were negotiating based on experience...after all, that Bush era spending that they pushed through really hasn't left the majority of Americans better off than they were back in 2000.

Now, the WaPo says GOP leadership is crowing about some sort of victory this represents for themselves - and I suppose that they have the right perspective about it, when we get to brass tacks - because it certainly isn't any kind of victory for the rest of us. We can only hope that the final package comes back around significantly improved after committee work and final passage.