The Obama/Democratic stimulus plan is drawing predictable fire from the Republicans, who now find fiscal sobriety after years of wild spending. The big debate is whether the $850 billion plan will really do the job to stop the recession, i.e. whether the Keynesian prescription can work. The debate already seems to have reached a deadening pitch of sound bites, exaggerations, pundit speak and so forth. Sometimes one wishes the First Amendment could be suspended.
The numbers are staggering, especially on top of the Tarp funds and other bailouts authorized under the Bush administration, not to mention the billions spent to destroy and then partially rebuild Iraq. Paul Krugman's main argument in favor of the plan is that monetary policy is already gone; the interest rates are already at zero. Curiously, in a column in The New York Times Monday countering Republican arguments, he didn't answer the view that Japan's similar stimulus package 10 years or so ago didn't work, and left it dead for 10 years. (However, they were still able to take on Detroit and slowly build dominance in the auto industry.)
The GOP says that the stimulus bill is laded with pork barrel items, and that a significant portion of the money will be spent in 2010, so there won't be an immediate jolt to the economy.
I tend to side with the Democrats' argument. Also, why not try it? Sure, inflation could rage out of control again, or is it deflation we fear? Reading and listening the news if often like the weather; the forecasts change quickly.
One thing the Republicans strongly object to is money for the National Edowment for the Arts. The arts can stimulate the economy too. And, there's a lot of artists/writers/editors out of work. Why not set up some kind of nonprofit newspaper/magazine/web site like PBS, to provide objective reporting, analysis that the public could depend on? Not likely to happen, I'm sure.
