From the Wall Street Journal’s opinion page, “The Right ‘Stimulus‘”:
As for a stimulus now, one that works would be marginal (at the next dollar of income), immediate and permanent. A proposal to bring the U.S. corporate rate into line with the rest of the world would help, and even better would be an across the board cut in income taxes to 30% from 35%. That would be real recession insurance.
Developments on the campaign, from Reuters, “Clinton to propose $70 stimulus: report“:
Democratic presidential contender Hillary Clinton on Friday will propose a $70 billion emergency spending package and possibly another $40 billion tax rebate to counter what she sees as a coming recession, according to the New York Times….[snip]
Clinton’s plan would provide $30 billion for an emergency housing crisis fund for states to help low-income families unable to make mortgage payments; $25 billion to help low-income families pay heating bills this winter; $10 billion to extend unemployment insurance for people unable to find jobs; and $5 billion for alternative energy programs, the Times said.
The Times story is here.
And from The Washington Post, “Stimulus Unlikely to Counter Rise in Oil Prices“:
Even though more economists are calling for a stimulus package of spending increases or tax cuts to keep the U.S. economy out of recession, climbing oil prices since September have had all the negative effects of a tax increase — one big enough to outweigh any likely stimulus.
The more-than-$30-a-barrel increase in oil prices over the past five months is like a $150 billion tax increase, said William D. Nordhaus, a Yale University economics professor. By paying more for oil, Americans have less left to save or spend. “It is clearly contractionary,” Nordhaus said.
Contradictory? Not really, unless you make no distinction between government spending and private-sector spending (or dollars sent to OPEC nations, too, for that matter).
Still, the Post story suggests a larger point. Stimulus is not just tax policy, although that should certainly be its foundation. Expanding export opportunities and increasing domestic oil and natural gas production are two critical steps the United States can take to stimulate the economy, WITHOUT increasing the role of government in the economy.
UPDATE (5:30 p.m.): Missed this Thursday. “Rudy Giuliani Proposes `Biggest Tax Cut’ in History”
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