Stimulus Package Gets Mixed Reception

February 01, 2008 09:26 AM
by findingDulcinea Staff
Is it too little or too late? Then again, some economists think the booster an ineffective weapon targeted at a recession that may never arrive.

30-Second Summary

The Senate Finance Committee approved an economic stimulus package Wednesday that would funnel $200 billion into the economy. Under the Senate proposal, individuals making up to $150,000 will receive a tax rebate.

The Senate bill extends unemployment benefits and allocates a third of the package to investment, CNN reported.

A narrower package with stricter income requirements got House clearance on Tuesday.

The Senate is expected to vote on the legislation Thursday.

Reactions to the proposal were mixed. While some in the housing industry welcomed the move, others say the incentives are too small to boost consumer demand. Some congressional Democrats are eager to see more expansive measures taken as well.

Most critics of the proposal, however, attack not its scale but its substance.

Economics Professor Steven E. Landsburg argues in The Washington Post that the package has contradictory aims: to boost both consumption and investment, which are “natural rivals.”

Harper’s contributor Scott Horton took an extreme view, saying Bush’s mismanagement of the economy will inevitably produce a recession, and the package is only meant to postpone it so Bush can foist off responsibility onto his successor.

Chicago Tribune
columnist Steve Chapman questions not only the effectiveness of the proposed measures, but also the rationale behind adopting them. The likelihood of recession may have been overstated, he argues, citing new Congressional Budget Office figures.

Headline Links: Bush’s stimulus package

Reactions: The housing industry

Opinion & Analysis: Bush’s plan and the likelihood of a recession

The stimulus will not prevent recession
Chances of recession smaller than expected
Predicting a recession is not easy
‘The NBER’s Recession Dating Procedure’

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