Obama's Latest Stimulus Plan Gets Panned By Krugman

[onehandle]

In a speech in Cleveland tomorrow, President Obama will propose an economic stimulus plan that would allow businesses to deduct immediately the entire cost of new equipment from taxes, instead of having to deduct it over the course of up to 20 years, as is the case now. The tax credit is the latest plan to revive the sputtering economy and to prove to critics that the president supports business -- but some are skeptical about whether it can work.

The New York Times's Paul Krugman isn't so sure it's a good idea to put more money in companies' hands, arguing that an increase in public works spending might actually do more to help the economy. Obama's plan includes $50 billion to spend on infrastructure, a figure that Krugman thinks is paltry.

If the president's proposal is in part a political stratagem, Krugman says he should make it bolder. Indeed, with midterm elections approaching, Congress would effectively have only three weeks to pass the legislation before lawmakers begin campaigning, and before the balance of power could shift significantly: The plan might be doomed from the start.

http://www.huffingtonpost.com/2010/09/07/obamas-latest-stimulus-pl_n_707421.html

[Vincardog]

Why doesn't Congress pass a law that states 'for every increase in Military spending there must be

an equal amount spent directly on money sent to the people'.? Make it checks for the LONG term un and under employed.

[Lorien]

4. I like this idea

and let's specify "non-corporate people".

[Vincardog]

6. OK "non-corporate people" AKA Natural people and ALL the money must go them .

[shireen]

8. +1000000!!

[tk2kewl]

1. I also think $50B for repairs should not be thought of as a stimulus.

It's like saying doing the dishes after dinner is like building a new kitchen.

The number is off by an order of magnitude for what is needed in the way of 21st century infrastructure and jobs.

[Lorien]

5. +1 nt

[Lost4words]

10. isnt that the truth?! nt

[phleshdef]

11. Why don't people pay attention? The 50 billion number was announced as a small down payment...

...into an infrastructure bank that is intended to have a lot more money than that put into it.

[ProSense]

2. More distortion.

Krugman

The American Society of Civil Engineers doesn't think the President's plan is "paltry."

[zipplewrath]

12. Krugman doesn't design buildings

Well, that's where I always go for evaluations of economic policy.

Krugman doesn't design buildings, I'm not sure I'd go to civil engineers for economic policy.

[Phx_Dem]

3. Well that's shocking.

[paulk]

7. the article makes a great point in that companies have no

reason to invest in new equipment if there's no demand for their product.

Once again Obama and his economic team are coming down on the supply side when it's demand that is lacking.

They need to come up with something that puts money in the hands of consumers, and the $50 billion for infrastructure, while paying lip service to the right direction, is really just a drop in the ocean.

And if Obama is going to use this as a trade off for Bush's tax increases - then I don't know what to say or think about him and his team anymore. That would be beyond pathetic...

[ClarkUSA]

9. The OP title is misleading. Krugman actually wrote, "It's a good idea."

To read the actual op-ed and discussion based on the facts, go here:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=433599&mesg_id=433599

[Bleacher Creature]

13. Thanks. Was about to post the same thing.

Krugman believes that it is too little and too late, but ultimately a good idea. That's very different than "panning" it.

[craigmatic]

14. It's too late to be politically effective.