Brad DeLong Has A Proposal
Even though we’ve seen improvement in the overall economy, the economic recovery will be long and painful. The latest unemployment numbers showed a jump in unemployment to 9.4% (U3) and the economy still lost >300,000 jobs last week. There’s been talk in some places of a second stimulus package because the first was not large enough. One of the most painful cuts from the Republican 3 (Snowe, Collins and Specter) was the cut of aid to states and we can see that has consequences for Delaware. Economist Brad DeLong has a proposal for a second stimulus package.
I therefore believe:
That it is past time for you to seek from the Congress for authority to guarantee the debt of states that, in response to the current recession, (a) seek to conduct their own state-level fiscal expansions, and (b) devise plans and strategies for the long-term repayment of the debt the federal government guarantees that the Secretary of the Treasury certifies as prudent and sustainable. That it is time for you to seek from the Congress an amended Budget Resolution: to include in this year’s forthcoming Reconciliation process an additional $500 billion of federal aid to states, distributed per capita and conditioned on their maintaining effort at the provision of public services–on their not repeating the mistake of Herbert Hoover of cutting government employment and spending in a downturn.
I think this is an intriguing idea and could help Delaware avoid painful cuts while it gets its fiscal house in order.
Tags: Economy, Stimulus Plan 2009
Noooooooooooooooooooooooooooooooooo!!!!!!!!!!!
The state needs NO MORE incentives to maintain the status quo. We need to tighten the belt and rid ourselves of a lot of bullshit.
Alright, let’s print mooore money !!!!!!!! SWEET!!
The state needs NO MORE incentives to maintain the status quo.
This isn’t about Delaware. It’s about the nation.
If the nation recovers, especially banking and housing, Delaware will recover.
I don’t know if additional spending is required or not to help the nation recover. I don’t have any dogmas about it. But if it is required, we shouldn’t shrink from it, we should do it and figure out how to fund it and deal with it.
Why would we need a second ‘stimulus,’ when we’ve only ‘spent’ $112-billion of the original $800-billion TARP fund?
How can I argue with such well-reasoned arguments?
TARP is different than the stimulus.
FSP,
I do agree that we need to change the status quo. We need to diversify our sources of revenue so that the state budget isn’t on a huge roller coaster. What we don’t need is cut services to people who need it the most.
I think the proposal includes using some of the TARP money for this stimulus, in the first part. It’s also great if banks want to pay back the TARP money, we can use it where it really needs to go.
“What we don’t need is cut services to people who need it the most.”
Like Lonnie George?
Cuts to services for the needy are not going to happen, nor do they have to happen. But each dollar that comes from the federal government comes with strings attached and those strings nowadays involve loads of mandatory additional state spending, even into the future when the federal money dries up.
It’s almost as if the administration wants the states in a position of permanent need.
Sorry, UI…let me rephrase; why would we need a second stimulus, when the White House said recently that only $112 billion of the initial $800 billion stimulus fund has been spent or obligated?
That money is already rolling out and is marked for projects. A lot of economists think the stimulus was too small, and that taking out aid for states was a big mistake.
Why not just send everyone a check for a million, no make it two – the first one will get lost to taxes. That’ll fix everything. Can’t wait till I get mine. Take some advice, spend it fast, it wont be worth anything for long.
Henry Morgenthau, Jr. was FDR’s personal friend, Secretary of the Treasury from 1934-1945, and was among the architects of the New Deal.
Morganthau:
“We have tried spending money. We are spending more money than we have ever spent before and it does not work. And I have just none interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job, I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!”
It didn’t work then, either.
(Of course, we can all hope for WWIII to bail us out)