Wednesday, February 11, 2009

Economic Stimulus Package Passed Today

Today the stimulus package passed through congress.  What that means is best left to the experts, i.e., not me.  However today there was a good article in the WSJ posing a contrarian view (not uncommon, in fact, maybe there are so many conflicting views, it may not be contrarian at all, but mainstream).

And after reading some of the comments, here are my thoughts:

I think it is funny how many armchair economists discount the ideas of Mr. Becker and Mr. Murphy.  Becker and Murphy definitely know what they are talking about.  As a small business owner and a tax payer, the part that worries me the most is the expected return on the stimulus spending.  I am in agreement that the multiplier will be well below one, that is, unless you look ahead 10 to 20 years when some of these investments may pay off.  I am sure congress has good intentions with this bill, but they are still just politicians.  I would have been much happier if they crafted their plans, multiple ones and held an emergency popular vote so we as citizens could lobby for, and finally vote on our economic stimulus plan.  At this point, does anyone trust congress on the matter?  I certainly don't, and it seems most people who are more informed that me, of which there are many, are not in agreement either.

There are a few economists that I agree with strongly.  Those who believe that the government should help to make sure small businesses could succeed and thrive.  This would be an integral component to restoring confidence and stability to the economy.

Free up money so local businesses can keep their doors open or open new ones.  Help the local economies thrive by lowering the cost of capital and lowering health care costs (no one saw Sicko?).  Every dollar spent in a small business goes right back into the economy unlike money spent trying to shore up stock prices.  If you put the money into the communities people will be able to find jobs.  So what if the stock market falls to 20 or 30 year lows.  The government just has to admit it screwed up royally and needs to start over again.

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