National Journal Magazine
In normal times, Congress might never enlarge so many programs at once. But, as with Reagans tax cut, the crisis-induced demand for action may suspend the normal laws of political gravity — and allow Democrats to redirect federal priorities as boldly as Reagan did. “This is a once-in-a-25-year opportunity to [implement] a lot of our agenda,” a top House Democratic aide says. Largely for that reason, most congressional Republicans are likely to resist the plan, no matter how many more tax cuts Obama offers them.
The article in its entirity talks about how the stimulus package is a chance for Democrats to redefine how government action relates to the economy. I think that is a pretty good assessment, and one that will probably have some pretty long term reprecussions.
It is a pretty big departure from how we have looked at this sort of problem for almost 30 years. Many Democrats see this as a huge assett, since they feel that the last 30 years have resulted in very uneven economic gains, with the rich getting the lions share of the benefits.
I am doubtful that this new approach, even if it is as effective in general economic terms will actually succeed in any way in reducing the income gap. I expect that the opposite will occur, as this government transfer of wealth will disproportionately transfer wealth from people without economic (and hence political) power to those who have it. The intentions in many cases are good, but the problem of focused special interests remains.
That said, I’m not entirely oppossed to this. My basic read on the economy is that we do need to increase government spending (or reduce taxes) to increase the money supply. Inflation remains low, indeed deflation seems more of a risk right now and that needs to be avoided. The how we spend it is probably less important then the spending itself.
I’m not positive how much though. The 700 billion bank saving bill hasn’t had a chance to work its way through the economy at all yet, and passing another 900 billion this soon seems to me to risk pretty signifigant inflation. High inflation though is probably not as risky as deflation, so I’m on the fence on that. Different economists are saying differnt things, of course, but there does seem to me a majority that think we need more then what has already been passed.
I also am favorably inclined to increased funding for scientific research, education, and some of the infrastructure they are propossing. Long term investment of this sort probably makes sense, even with the inevitable inefficiencies of government tied onto them.