the visible hand

it is the theory which decides what can be observed – einstein

Smart stimulus to counteract the economic slowdown

Posted by ecoshift on January 21, 2008

Some attention to green tech, renewables, reducing dependence on oil, etc. would be worthy of consideration as well, but perhaps this fits within existing pro-growth frames well enough to have a chance of implementation. Worth a read…

Strategy for economic rebound: Smart stimulus to counteract the economic slowdown
January 11, 2008 | Economic Policy Institute Briefing Paper #210
by Lawrence Mishel, Ross Eisenbrey and John Irons”

After months of battering by high winds in the housing and credit industries and a year of slowdown in job growth, there is broad agreement that the economy is tipping into recession or rising unemployment. This week’s report that the past holiday season was the weakest for retailers since 2002 makes it unlikely that cash-strapped consumers will be able to buy our way out of the slump and gives credence to rising concern that the recession we’ve been dreading may already have arrived.

Against this backdrop, the Economic Policy Institute today unveiled a broad-based, three-part prescription for stimulating the economy and urged lawmakers to take quick action in order to prepare the nation and working Americans to weather what’s ahead.

We need to shore up the economy before the storm hits full force, and time is crucial, said EPI president Lawrence Mishel. The right kind of strong action now can help limit the rise in unemployment and losses in income that can be expected in the next recession.

EPI’s plan, titled “Strategy for an Economic Rebound”… calls for federal investment of about $140 billion (1% of total GDP) an amount big enough, when properly targeted, to make a difference. To achieve optimal targeting, that amount would be allotted among four kinds of expenditures: infrastructure, relief to the states, help to unemployed individuals, and targeted tax rebates.

read more…


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