We often hear the question “isn’t this economic crisis becoming as bad as the Great Depression?” Economists can offer a variety of reassurances, but each of them is quite circumscribed:
Category Archives: fiscal stimulus
Is $800 Billion Too Big or Too Small? Yes.
Congress has finally agreed on a $790 billion stimulus package. Is it too small, as many Democrats claim (such as Paul Krugman), or too big, as many Republicans claim (such as the minority party leadership in Congress)? The answer is yes. It is too big and too small.
Stop Distorting Spending Priorities into Tax Cuts
It is unfortunate that much of the congressional debate regarding the stimulus package is phrased in terms of a summary statistic: what fraction of the stimulus is to be increased spending and what fraction is to be tax cuts. It currently looks to be about 70-30, but the Republicans say they want more in tax cuts and the Democratic holdouts say they want more in spending.
To judge the merits, one has to go into greater detail.