Monday, February 09, 2009

Krugman makes some valid points...

In this piece written by Paul Krugman, The Destructive Center this stuck in my mind:
One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.

On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

There are questions related to the $16 billion dollars on school construction, but I don't think all of that should have been cut. I don't however disagree with Krugman's point that many of the measures that would have done the most to reduce the economic pain being felt by citizens have been diluted/eliminated. The explanation for those cuts is something that Senator Arlen Specter doesn't share in his defense of why he is supporting the changes to the stimulus plan.

2 comments:

J. Rowsey said...

I heard Arlen Specter today on a popular radio show and I don't think he can really give an explanation as to why he is now supporting the plan.

Alex said...

Krugman's article was excellent. It implies one of my primary concerns with the premises on which Obama was elected: bi-partisanship as a principle is quixotic.