The stimulus package will be lame.
What started out as a reasonable, though not perfect, stimulus plan has been ruined by Republicans in Congress:
REPORTED STIMULUS PACKAGE WOULD PROVIDE LITTLE IMMEDIATE BOOST DUE TO REMOVAL OF MOST EFFECTIVE PROVISIONS
Changes reportedly made last night in the stimulus package would reduce its effectiveness as stimulus. Although the package includes a reasonably designed tax rebate, the two most targeted and economically effective measures under consideration — a temporary extension of unemployment benefits and a temporary boost in food stamp benefits — were zeroed out, apparently at the insistence of House Republican leaders.
The two respected institutions that have rated stimulus options in recent days — the Congressional Budget Office and Moody’s Economy.com — both give their two highest ratings for effectiveness as stimulus to the two measures that were dropped.
Of all tax and spending stimulus options that CBO examined, the only two that it found would have a large “bang-for-the-buck” as effective stimulus and act fast to boost the economy are the unemployment insurance and food stamp provisions.
But they are keeping the business tax cuts, even though they may make the economic situation worse:
The business tax cuts also would cause states to lose at least $4 billion in state revenue, due to linkages between federal and state tax codes. The package contains no fiscal relief for states, not even to offset this loss. As a result, many states will have to enact deeper and more painful budget cuts, likely hitting areas from health care and education to aid to local governments. Those state budget cuts will also act as a drag on the economy.
Do Republicans really still believe in supply side unicorns and the Trickle-down Fairy, or do they just love giving money to the rich and hate helping out the poor so much that they don't care about preventing a recession?
And of course we can expect Democratic leaders in Congress to go along with the whole farce in order to "get something done."
