I am unable to predict the future. Now that we have this confession of out the way, allow me to gaze into my crystal ball. No, not the one that has the skyline of London and snow flakes.
I have listened to pundit after pundit, market analyst after market analyst, and I am hearing a narrow range of responses to the question, “will this stimulus package work?” That answer falls somewhere between cautiously hopeful to a flat out no. The only resounding “yes” that I’ve heard comes from the President, and all the President’s men.
Business analysts are struggling to stitch together the connection between the economy’s current needs and the stimulus plan. There is, however, a very clear response to the follow up question, “what would work?” Swift and permanent tax cuts, and tax credits. These provide an immediate injection of financial relief to the American public, and go a long way to easy financial stress, and per household spending.
There is also a sound argument made for infrastructural spending. Though the first dollar of infrastructural spending won’t likely enter the economy until it has already lifted itself up off its knees, it would provide a nice jolt to the economic rebound.
How effective will the rest of the economic stimulus package be? This is where the crystal ball turns hazy, for everyone. I hear an oft repeated phrase from liberal pundits, ‘It’s better to do too much, than to let the economy slide into a depression.’ Such extreme rhetoric is typically accompanied by inferior ideas, or, in this case, stimulus plans. Expect billions in governmental expenditures on countless “pet” projects, but don’t expect any permanent or even long-lasting economic results from these projects.