An overoptimistic stimulus plan: Jeff Jacoby’s Column of 1/28/09

Background.  Jeff Jacoby quotes a CBO report that not enough of it will be spent by the end of 2010.  He also argues “Real-world evidence of the inefficacy of pump-priming abounds.”


Dear Jeff,

Perhaps you haven’t heard, but the Congressional Budget Office report that you quote so authoritatively was withdrawn because it was totally inaccurate.  Obama’s Press Secretary Robert Gibbs told the press that the report looked at “only a portion of the legislation and looked at that portion of the legislation before it began the committee process.” Gibbs added that it reflected “a snapshot in time that’s long past.” 

As for your claim that pump priming will not work.  Let me be blunt.  You do not know.  Rather, you have beliefs, and you cherry pick evidence to support them.   I think Warren Buffett put it best.  “The answer is nobody knows. The economists don’t know. All you know is you throw everything at it … What we do know is to stand by and do nothing is a terrible mistake.” 

You also write “ As far as I know, no prominent market-oriented economist has come out in favor of a trillion-dollar increase in government spending as a way to improve the economy.”   Perhaps this is because “market-oriented economists” is not a term used by economists or just about anyone else.   Google lists 592 hits for this term, and the first two references were both to your editorial.   It lists 90 million hits for the word economist.

Perhaps the stimulus plan will not work well.  But, I would rather have Obama’s economic team trying to deal with our ailing economy that anyone you would choose.  I’m not sure that the stimulus will work, but it’s far better than gambling our future on doing nothing.

Regards, Jim


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