Cultural Revolutions

Stimulus Winners and Losers

The faltering economy is the major concern of most Americans.  According to a recent AP poll, 47 percent of us are at least somewhat worried about losing our jobs, up from 28 percent one year ago.  And 71 percent know a friend or relative who has lost his job within the past six months.  Thus far, the Obama administration’s response to these economic worries has been the $787 billion stimulus package, signed into law on February 17 as the American Recovery and Reinvestment Act of 2009.  Despite the grandiose title, there is little reason to believe that it will help the economy to recover from recession.

Even those who accept the controversial premises of Keynesian economics doubt the bill will do much.  Economist and New York Times columnist Paul Krugman wrote on February 9 that, even before cuts were made in the stimulus package to win over Sens. Arlen Specter, Olympia Snowe, and Susan Collins—the only Republicans in either house to vote for it—“it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.”  Krugman also criticized the stimulus package as being “too heavily reliant on tax cuts.”  The bill’s largest tax cut is a $116 billion payroll-tax credit, which will provide a credit of $400 per year per taxpayer, with only individuals...

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