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Debate: 2009 US economic stimulus

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-===Write debate main question here...===+=== Is the 2009 US economic stimulus package a good plan to combat recession? ===
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 +=== Background and context ===
-===Background and Context of Debate:===+Toward the end of 2008 and in the beginning of 2009, the United States and global economies began to experience widespread recession. Multiple actions were taken to stimulate the economy in early 2008, late 2008, and in the beginning of 2009. [[Image:Obama and Pelosi.jpg|left|200px]][[Image:US Capitol.jpg|right|200px]] In January 2009, President Obama proposed a roughly $800 billion stimulus package. In early February, both the US House of Representatives and Senate voted to pass modified versions of Obama's stimulus plan, called the [http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009 American Recovery and Reinvestment Act of 2009]. Throughout this period, the nation and world engaged in a vigorous public debate on the merits of the plan, highlighting key philosophical differences in the United States and societies around the world on economic and social theory.
 + 
 +Many questions have framed the debate. Can the government stimulate the economy? Or, is the government incapable of successfully intervening and managing the economy? What does history, particularly surrounding the New Deal's impact on the Great Depression, reveal about the capacity of large spending programs to help end recessions? Is the stimulus package the right size, or is it too large, or event too small? Is the emphasis in the stimulus on spending appropriate, or do tax cuts provide better stimulus and deserve greater emphasis? Are the right kinds of stimulus included in the package? Is it appropriate, for example, to include longer-term spending projects, or does this fail to provide immediate stimulus? Does the stimulus include too much "pork" and room for wasteful spending? What are the consequences of inaction? Would it result in the next depression? Or is the government powerless to help in any case? Might the stimulus actually make things worse by adding to the national debt? Is the Buy American provision appropriate, or will its "protectionist" elements exacerbate the recession? Do the balance of pros and cons favor voting yes and passing the stimulus bill?
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 +''See Wikipedia's article on the [http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009 American Recovery and Reinvestment Act of 2009] for more background.''
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- +===Government stimulus: Is the government generally capable of stimulating the economy? ===
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====Pro==== ====Pro====
-*'''Large spending is right approach to stimulating US economy.''' [http://online.wsj.com/article/SB123008280526532053.html Martin Feldstein. "Defense Spending Would Be Great Stimulus". Wall Street Journal. December 24, 2008] - "As President-elect Barack Obama and his economic advisers recognize, countering a deep economic recession requires an increase in government spending to offset the sharp decline in consumer outlays and business investment that is now under way. Without that rise in government spending, the economic downturn would be deeper and longer. Although tax cuts for individuals and businesses can help, government spending will have to do the heavy lifting."+*'''[[Argument: Govt spending stimulates consumer spending, business growth| Govt spending stimulates consumer spending, business growth]]''' [http://online.wsj.com/article/SB123008280526532053.html Martin Feldstein. "Defense Spending Would Be Great Stimulus". Wall Street Journal. December 24, 2008] - "As President-elect Barack Obama and his economic advisers recognize, countering a deep economic recession requires an increase in government spending to offset the sharp decline in consumer outlays and business investment that is now under way. Without that rise in government spending, the economic downturn would be deeper and longer. Although tax cuts for individuals and businesses can help, government spending will have to do the heavy lifting."
-*'''[[Argument: Large stimulus is appropriate for large economic crisis| Large stimulus is appropriate for large economic crisis]]''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "President Obama's call for a large stimulus plan is under assault by arguments as unpersuasive as they are uninformed. Is the stimulus plan large? Yes, and with good reason. Our economic problems are as well. With consumers poorer from $6 trillion in vanished housing wealth and $7 trillion in vaporized stock, we're set to suffer annual losses in overall economic activity of a trillion dollars this year and a trillion or more next year. It's not just consumer spending that has collapsed. Other traditional generators of economic growth - business investment, housing construction, and exports - are all anemic. You can trace the effects of the sharp economic contraction in frequent stories about massive layoffs. That leaves government spending as the nation's best hope for softening a major downturn. To address a projected loss of more than $2 trillion in economic activity, Congress is debating an overall stimulus package of $819 billion to $900 billion. Although those figures sound large, on a dollar-for-dollar basis they would plug less than half the growing hole in the economy. So the stimulus size is hardly excessive - and conservatives' calls for cutting it back make little sense."[http://www.commondreams.org/headline/2009/01/28-11]+*'''[[Argument: Majority of economists believe government can stimulate economy| Majority of economists believe government can stimulate economy]]''' [http://www.realclearpolitics.com/articles/2009/02/country_needs_stimulus_not_bip.html Eugene Robinson. "Roll over the Republicans". Real Clear Politics. February 10, 2009] - "Begin with the most fundamental question: Does the U.S. economy desperately need a massive stimulus, or not? There are economists who doubt it's possible for the government to effectively stimulate an economy of such size and complexity. Those economists, however, are in the minority. [...] The most respected economic wise men and women of both parties believe a huge stimulus is needed quickly to keep a dire economic situation from sinking into catastrophe."
-*'''Stimulus risks being too small not too large.''' Robert Kuttner, co-editor of The American Prospect. - Stimulus "needs to be adequate to do the job. Eight hundred and twenty billion is about 2.5% of GDP. But the economy is sinking at the rate of five to six percent. So they may find out they have to come back and ask for more." Prominent economist Paul Krugman has also stated he believes that roughly $800b in economic stimulus is "too small".[http://www.nytimes.com/2009/02/09/opinion/09krugman.html]+*'''[[Argument: 2009 US stimulus will create or save millions of jobs| 2009 US stimulus will create or save millions of jobs]]''' [http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009] - "At [the] core [of the Recovery and Reinvestment Plan] is a very simple idea: to put Americans back to work doing the work America needs done. [...] The plan will save or create three to four million jobs over the next two years. But not just any jobs - jobs that meet the needs we've neglected for far too long and lay the groundwork for long-term economic growth: jobs fixing our schools; computerizing medical records to save costs and save lives; repairing our infrastructure; and investing in renewable energy to help us move toward energy independence. The plan also calls for immediate tax relief for 95 percent of American workers."
-*'''Vast majority of stimulus bill is good stimulus.''' Jim Horney, director of federal fiscal policy for the Center on Budget and Policy Priorities - "The vast majority of what is in these two bills is pretty good stimulus."[http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/]+*'''[[Argument: Stimulus will succeed with good management and supplemental action| Stimulus will succeed with good management and supplemental action]]''' The right set of spending, management, and supplemental action can ensure that the stimulus is effective. The stimulus package itself is only one part of the equation. Ensuring against no-bid contracts, enforcing transparency, and efficiently administrating the rapid expenditure of funds is very important. In addition, it is important to simultaneously shore up the financial system with a plan to fix the housing market and thaw the credit market. All these things must be done in concert in order for the stimulus to be effective.
-*'''[[Argument: Almost all government spending has some stimulus effect| Almost all government spending has some stimulus effect]]''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "Although one can debate the necessity or importance of various projects, almost any new spending will have a stimulative effect - including resodding the National Mall." 
-:[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "Spending is stimulus, no matter what it's for and who does it. The best spending is that which creates jobs and economic activity now, has big payoffs later and disappears from future budgets." 
-*'''Funding new government jobs will stimulate the economy.''' [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "And then there is Sen. Tom Coburn (R-Okla.), complaining in Wednesday's Wall Street Journal that of the 3 million jobs that the stimulus package might create or save, one in five will be government jobs, as if there is something inherently inferior or unsatisfactory about that. (Note to Coburn's political director: One in five workers in Oklahoma is employed by government.)"  
-*'''[[Argument: Much stimulus rightly goes toward good social projects| Much stimulus rightly goes toward good social projects]]''' [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "what's striking is that supposedly intelligent people are horrified at the thought that, during a deep recession, government might try to help the economy by buying up-to-date equipment for the people who protect us from epidemics and infectious diseases, by hiring people to repair environmental damage on federal lands and by contracting with private companies to make federal buildings more energy-efficient." +|WRITE CONTENT FOR THE "Pro" BOX ABOVE THIS CODE width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top: 0.5em;"|
 +====Con====
-*'''Longer-term spending is not "waste"; helps sustain stimulus.''' [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "Let’s review some of the more silly arguments about the stimulus bill, starting with the notion that 'only' 75 percent of the money can be spent in the next two years, and the rest is therefore 'wasted.' As any economist will tell you, the economy tends to be forward-looking and emotional. So if businesses and households can see immediate benefits from a program while knowing that a bit more stimulus is on the way, they are likely to feel more confident that the recovery will be sustained. That confidence, in turn, will make them more likely to take the risk of buying big-ticket items now and investing in stocks or future ventures."+*'''[[Argument: Economic stimulus by government intervention always fails| Economic stimulus by government intervention always fails]]''' [http://www.csmonitor.com/2009/0209/p09s01-coop.html Robert Higgs. "Instead of stimulus, do nothing - seriously". Christian Science Monitor. February 9, 2009] - "Hardly anyone [...] is asking the most important question: Should the federal government be doing any of this? [...] Federal intervention rests on the presumption that officials know how to manage the economy and will use this knowledge effectively. This presumption always had a shaky foundation, and we have recently witnessed even more compelling evidence that the government simply does not know what it's doing. The big bailout bill enacted last October; the Federal Reserve's massive, frantic lending for many different purposes; and now the huge stimulus package all look like wild flailing - doing something mainly for the sake of being seen to be doing something - and, of course, enriching politically connected interests in the process."
-*'''Only a small fraction of the stimulus is "pork".''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "Nor is it true, as some critics would have you believe, that the plan is a farrago of fiscal fat that will be all sizzle and no steak. Yes, there are some questionable items, but they are only a small fraction of the proposals."+*'''[[Argument: Stimulus spending violates principles of supply-side economics| Stimulus spending violates principles of supply-side economics]]''' [http://www.forbes.com/2008/02/14/yaron-economy-regulation-oped-cx_ybr_0214yaron.html Yaron Brook. "To Stimulate The Economy, Liberate It". Forbes. February 14th, 2008] - "we must first recognize that the key economic activity that causes growth is not consumer spending but production. [...] Economic growth means an increase in the amount of wealth that exists in a country--and all wealth must be produced. [...] The focus of today's stimulus packages on consumer spending is therefore completely backward. Consumption is a consequence of production. This fact is ignored by the Bush plan [and Obama plan], which attempts to achieve prosperity through $100 billion in deficit-spending. Though this might bring the appearance of prosperity, in the same way that an unemployed man appears prosperous if he goes on a shopping spree with his credit cards, the reality will be the opposite."
-*'''[[Argument: Spending provides more economic stimulus than tax cuts| Spending provides more economic stimulus than tax cuts]]''' Lawrence Mishel, president of the Economic Policy Institute - "Personal tax cuts are much less effective than spending, and business tax cuts are much less effective than personal tax cuts"[http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/]+*'''[[Argument: Stimulus is from taxes or debt; injects no new money| Stimulus is from taxes or debt; injects no new money]]''' Stimulus package spends money by first taxing it out of the economy or borrowing it through bonds. Either way, the money injected is not "new" money, but taken from the economy, so adds no new wealth to the economy.
-*'''[[Argument: Stimulus is better than consequences of no stimulus| Stimulus is better than consequences of no stimulus]]''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "No one is going to get exactly what they want, but getting nothing is a far, far worse outcome. It would be an act of extreme national stupidity not to enact a big stimulus bill at this point."+*'''[[Argument: New Deal did little-to-nothing to end the Depression| New Deal did little-to-nothing to end the Depression]]''' While many liberals claim that the New Deal helped stop the Great Depression, many other economists and historians argue that the New Deal only worsened the Great Depression by adding to the national debt.
-:[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/08/AR2009020801710.html Arlene Specter. "Why I Support the Stimulus". Washington Post. February 9, 2009] - "I am supporting the economic stimulus package for one simple reason: The country cannot afford not to take action. [...] The unemployment figures announced Friday, the latest earnings reports and the continuing crisis in banking make it clear that failure to act will leave the United States facing a far deeper crisis in three or six months. By then the cost of action will be much greater -- or it may be too late. [...] Wave after wave of bad economic news has created its own psychology of fear and lowered expectations. As in the old Movietone News, the eyes and ears of the world are upon the United States. Failure to act would be devastating not just for Wall Street and Main Street but for much of the rest of the world, which is looking to our country for leadership in this crisis."+
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 +===Consumer confidence: Will the stimulus improve consumer confidence?===
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 +====Pro====
-|WRITE CONTENT FOR THE "Pro" BOX ABOVE THIS CODE width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top: 0.5em;"|+*'''Stimulus is good for consumer and market confidence.''' A stimulus package adds to consumer confidence by giving, at a minimum, the impression that things are going to be OK. As a result, it encourages businesses and consumers to spend more than they otherwise would, which has a positive effect on the economy.
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====Con==== ====Con====
-*'''Stimulus bill contains too much non-stimulus spending.'''+*'''[[Argument: 2009 US stimulus won't generate consumer confidence| 2009 US stimulus won't generate consumer confidence]]''' [http://www.foxbusiness.com/story/markets/industries/finance/governments-stimulus-plan-wont-arouse-consumer-spending/ Chuck Jaffe. "Government's Stimulus Plan Won't Arouse Consumer Spending". Fox Business. February 3, 2009]: "put on your consumer hat, look at the proposed stimulus bills, ideas and notions, and ask yourself if any piece of the legislation would make you positive enough about the economy and your personal financial situation to relax and feel good."
-*'''Stimulus may not work; an unacceptable gamble with $1 trillion.''' Martin Feldstein, chairman of the Council of Economic Advisors under Ronald Reagan, wrote in January 2009, "It is of course possible that the planned surge in government spending will fail. Two or three years from now we could be facing a level of unemployment that is higher than today and that shows no sign of coming down."[http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953]+|-
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 +===Size: Is the size of the stimulus package appropriate?===
-*'''US government is powerless to affect economy with stimulus.''' [http://www.slate.com/id/2207920/ Eliot Spitzer. "Robots, Not Roads". Slate. Jan. 5, 2009] - "the capacity of even the U.S. government to affect the overall global economy is limited. Suppose the package is $800 billion over two years: $400 billion is less than 1 percent of the global economy and a mere 3 percent of the U.S. economy. In relative terms, $400 billion isn't all that much more than the $152 billion spent on the 2008 stimulus, which had nary an impact on the economy."+|-
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 +====Pro====
-*'''Spending and borrowing got US into crisis, won't get it out.''' Andrew Schiff, an investment consultant at Euro Pacific Capital said to Politico: "All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place."[http://www.politico.com/news/stories/0109/18068.html]+*'''[[Argument: Large stimulus is appropriate for large economic crisis| Large stimulus is appropriate for large economic crisis]]''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "Is the stimulus plan large? Yes, and with good reason. Our economic problems are as well. With consumers poorer from $6 trillion in vanished housing wealth and $7 trillion in vaporized stock, we're set to suffer annual losses in overall economic activity of a trillion dollars this year and a trillion or more next year. It's not just consumer spending that has collapsed. Other traditional generators of economic growth - business investment, housing construction, and exports - are all anemic. [...] That leaves government spending as the nation's best hope for softening a major downturn."[http://www.commondreams.org/headline/2009/01/28-11]
-*'''Economic stimulus plan does not create any new demand.''' [http://corner.nationalreview.com/post/?q=YWE0OGQyMzNiMjg4MGNkZDc1N2I1NzlkMzY2YTQ2NDE= Brian Riedl, Heritage Foundation. "The Case for No Stimulus". National Review. February 3, 2009] - "That is a great question. The grand Keynesian myth is that you can spend money and thereby increase demand. And it’s a myth because Congress does not have a vault of money to distribute in the economy. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. You’re not creating new demand, you’re just transferring it from one group of people to another. If Washington borrows the money from domestic lenders, then investment spending falls, dollar for dollar. If they borrow the money from foreigners, say from China, then net exports drop dollar for dollar, because the balance of payments must adjust. Therefore, again, there is no net increase in aggregate demand. It just means that one group of people has $800 billion less to spend, and the government has $800 billion more to spend."+*'''[[Argument: 2009 US stimulus risks being too small not too large| Stimulus risks being too small not too large]]''' Robert Kuttner, co-editor of The American Prospect. - Stimulus "needs to be adequate to do the job. Eight hundred and twenty billion is about 2.5% of GDP. But the economy is sinking at the rate of five to six percent. So they may find out they have to come back and ask for more." Prominent economist Paul Krugman has also stated he believes that roughly $800b in economic stimulus is "too small".[http://www.nytimes.com/2009/02/09/opinion/09krugman.html]
-*'''US stimulus spends too much on roads and bridges.''' [http://www.slate.com/id/2207920/ Eliot Spitzer. "Robots, Not Roads". Slate. Jan. 5, 2009] - "The 'off the shelf' infrastructure projects that can be funded immediately and provide immediate demand-side stimulus are almost by definition not the transformative investments we really need. Paving roads, repairing bridges that need refurbishing, and accelerating existing projects are all good and necessary, but not transformative. These projects by and large are building or patching the same economy with the same flaws that got us where we are. Our concern should be that as we look for the next great infrastructure project to transform our economy, we might rebuild the Erie Canal and find ourselves a century behind technologically."+|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
-*'''[[Argument: Economic stimulus by government intervention always fails| Economic stimulus by government intervention always fails]]''' [http://www.csmonitor.com/2009/0209/p09s01-coop.html Robert Higgs. "Instead of stimulus, do nothing - seriously". Christian Science Monitor. February 9, 2009] - "As we wait to see how the politicians in Washington will alter the stimulus package the Obama administration is pushing, many questions are being raised about the measure's contents and efficacy. Should it include money for the National Endowment for the Arts, Amtrak, and child care? Is it big enough to get the economy moving again? Does it spend money fast enough? Hardly anyone, however, is asking the most important question: Should the federal government be doing any of this? [...] In raising this question, one risks immediate dismissal as someone hopelessly out of touch with the modern realities of economics and government. Yet the United States managed to navigate the first century and a half of its past - a time of phenomenal growth - without any substantial federal intervention to moderate economic booms and busts. Indeed, when the government did intervene actively, under Herbert Hoover and Franklin D. Roosevelt, the result was the Great Depression. [...] Until the 1930s, the Constitution served as a major constraint on federal economic interventionism. The government's powers were understood to be just as the framers intended: few and explicitly enumerated in our founding document and its amendments. Search the Constitution as long as you like, and you will find no specific authority conveyed for the government to spend money on global-warming research, urban mass transit, food stamps, unemployment insurance, Medicaid, or countless other items in the stimulus package and, even without it, in the regular federal budget. [...] Federal intervention rests on the presumption that officials know how to manage the economy and will use this knowledge effectively. This presumption always had a shaky foundation, and we have recently witnessed even more compelling evidence that the government simply does not know what it's doing. The big bailout bill enacted last October; the Federal Reserve's massive, frantic lending for many different purposes; and now the huge stimulus package all look like wild flailing - doing something mainly for the sake of being seen to be doing something - and, of course, enriching politically connected interests in the process."+*'''$800 billion stimulus is just too massive.''' A $800 billion stimulus package is the largest stimulus spending bill ever devised (although there have been some tax cuts that could be considered larger). For this reason, it should be viewed with great suspicion, and, at a minimum, the debate over the bill and areas of wasteful spending should done patiently. Rush such a large bill through Congress makes little sense.
 + 
 +*'''[[Argument: Stimulus inadequate to impact massive US economy| Stimulus inadequate to impact massive US economy]]''' [http://www.slate.com/id/2207920/ Eliot Spitzer. "Robots, Not Roads". Slate. Jan. 5, 2009]: "the capacity of even the U.S. government to affect the overall global economy is limited. Suppose the package is $800 billion over two years: $400 billion is less than 1 percent of the global economy and a mere 3 percent of the U.S. economy. In relative terms, $400 billion isn't all that much more than the $152 billion spent on the 2008 stimulus, which had nary an impact on the economy."
-*'''[[Argument: Allowing recession will enable stronger economic recovery| Allowing recession will enable stronger economic recovery]]''' [http://www.etaiwannews.com/etn/news_content.php?id=860089&lang=eng_news&cate_img=83.jpg&cate_rss=news_Politics Amity Shlaes. "Obama's gift to GOP is challenge to supply siders". Bloomberg. February 9, 2009] - "Cut the tax rate on capital gains to 5 percent. Halve the corporate tax rate. Fund a new, super-strong Securities and Exchange Commission to monitor anything that's traded, including the haziest derivative. [...] Buy homeowners out of mortgages they can't afford, and protect the rights of lenders. Make Social Security solvent by curtailing the annual growth in benefits. Forget one "S" word, stimulus, and learn to use two "R" words -- rent and recession. [...] Too costly, you might say, or too extreme. But the ideas above are neither costlier nor more extreme than the almost- trillion-dollar stimulus package moving through Congress. And they are more likely to bring long-term growth than the legislation advanced by President Barack Obama." 
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-===Debt: Is adding to debt to stimulate the economy justified? ===+===Growing government: Does US stimulus right/wrongly grow government?===
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====Pro==== ====Pro====
 +*'''[[Argument: Only about 10% of US stimulus goes to govt projects| Only about 10% of US stimulus goes to govt projects]]''' [http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009] - "you may have heard some of the critics of our plan saying that it would create mostly government jobs. That's simply not true. More than 90 percent of these jobs will be in the private sector. More than 90 percent."
 +
 +*'''No evidence that stimulus supporters just want to grow government.''' While it may be true that some supporters of the stimulus have a hidden agenda to grow government, this is mere speculation, and to oppose the legislation merely on this basis would be to overlook the broader, legitimate arguments involved in the debate.
 +
 +*'''[[Argument: US stimulus charts path to better government programs| US stimulus charts path to better government programs]]''' [http://www.prospect.org/cs/articles?article=time_to_think_big Robert Kuttner. "Time to Think Big". American Prospect. February 10, 2009] - "Looking forward [beyond the stimulus], we need a very different sort of economy, one that restores a balanced form of capitalism. At the core of this change is a long-term increase in public outlay, investing in areas vital to economic growth and social decency. [...] An enhanced federal role, in turn, provides the moment to reclaim the public philosophy of activist government that effectively services people’s needs where market forces fail."
 +
 +*'''Government is good; growing government with stimulus is not bad.''' The idea that government is "bad" and that any growth in government engendered by the stimulus is subsequently "bad" is false. Government governs for the people and by the people. Unless one argues that the people are bad, government must be good. See [http://www.governmentisgood.com/ Government is Good.com] for an expansion on this argument.
-*'''Adding to debt/deficit to fight recession is justified.''' [http://belfercenter.ksg.harvard.edu/publication/18805/case_for_fiscal_stimulus_in_us.html Martin Feldstein. "The case for fiscal stimulus in U.S." The Korea Herald. February 3, 2009] - "Under normal circumstances, I would oppose this rise in the budget deficit and the higher level of government spending. [...] Now, however, increased government spending and the resulting rise in the fiscal deficit are being justified as necessary to deal with the economic downturn - a sharp change from the reliance on monetary policy that was used to deal with previous recessions. Countercyclical fiscal policy had been largely discredited because of the delays involved in implementing fiscal changes and households` weak response to temporary tax cuts. By contrast, the central bank could lower interest rates rapidly, which worked to raise household and business spending through a variety of channels."+*'''[[Argument: Funding government projects will stimulate jobs/economy| Funding government projects will stimulate jobs/economy]]''' [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "And then there is Sen. Tom Coburn (R-Okla.), complaining in Wednesday's Wall Street Journal that of the 3 million jobs that the stimulus package might create or save, one in five will be government jobs, as if there is something inherently inferior or unsatisfactory about that. (Note to Coburn's political director: One in five workers in Oklahoma is employed by government.)"
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====Con==== ====Con====
-*'''Adding to debt for stimulus will harm economy long-term.''' [http://corner.nationalreview.com/post/?q=YWE0OGQyMzNiMjg4MGNkZDc1N2I1NzlkMzY2YTQ2NDE= David Freddoso. "The Case for No Stimulus". National Review. February 3, 2009] - "Every penny of such a package must be borrowed, because the government is already running a $1.2 trillion deficit this year and faces a $703 billion deficit for next year, according to the non-partisan Congressional Budget Office. The question, then, is whether the government can help the economy by spending money if it can only do so by first sucking that money out of the economy."+*'''[[Argument: Stimulus will be used to grow govt bureaucracy| Stimulus will be used to grow govt bureaucracy]]''' The spending in the stimulus will go toward many government programs, growing them so that they become a constant burden on tax payers and constraint for free markets. None of this is desirable, and this is why tax cuts are a better alternative; it provides stimulus without growing government, and in fact, shrinking government.
 +:[http://www.cnn.com/2009/POLITICS/02/06/romney.stimulus/ Mitt Romney. "Commentary: Stimulate the economy, not government". CNN. February 6, 2009] - "These are extraordinary times, and like a lot of Republicans I believe that a well-crafted stimulus plan is needed to put people back to work. But the Obama spending bill would stimulate the government, not the economy. [...] In the final analysis, we know that only the private sector -- entrepreneurs and businesses large and small -- can create the millions of jobs our country needs. The invisible hand of the market always moves faster and better than the heavy hand of government."
|- |-
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====Pro==== ====Pro====
 +*'''[[Argument: Spending provides more economic stimulus than tax cuts| Spending provides more economic stimulus than tax cuts]]''' [http://www.economist.com/opinion/displaystory.cfm?story_id=12773125 "Filling the hole". Economist. Dec 11th 2008] - "Tax rebates or tax cuts will get more money into consumers’ hands quickly, but in today’s environment much of that boost will simply be saved, as people plug the holes in their finances left by the collapsing values of their houses and retirement portfolios, or just pay off debts. If consumers are unwilling to spend, the best way for a government to boost demand is to spend more itself. One approach is to send large dollops of federal cash directly to America’s struggling states"
 +
 +*'''[[Argument: Americans voted for progressive thinking of 2009 US stimulus| Americans voted for progressive thinking of 2009 US stimulus]]''' President Barack Obama - "The notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of health care, that we can somehow deal with this in piecemeal fashion and still expect our economy and our country to thrive. I reject those theories, and so did the American people when they went to the polls in November and voted resoundingly for change."[http://firstread.msnbc.msn.com/archive/2009/02/04/1780772.aspx]
|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"| |width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
 +*'''[[Argument: Tax cuts provide better economic stimulus than spending| Tax cuts provide better economic stimulus than spending]]''' Jason Furman and Douglas Elmendorf of the Brookings Institution wrote, "Fiscal policy implemented promptly can provide a larger near-term impetus to economic policy than monetary policy can."[http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953]
 +
 +
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +
 +===Immediate stimulus: Does the bill provide sufficient immediate stimulus?===
 +
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 +
 +*'''Majority of US stimulus is immediate to fight recession now.''' Jim Horney, director of federal fiscal policy for the Center on Budget and Policy Priorities - "The vast majority of what is in these two bills is pretty good stimulus."[http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/] This includes "automatic stimulators", such as unemployment benefits and food stamps, money that is typically quickly and fully spent. In addition, the majority of money will be spent within the first year of the stimulus package, providing more short-term, "good" stimulus to get the economy rolling quickly.
 +
 +*'''[[Argument: Longer-term spending is not "waste"; helps sustain stimulus| Longer-term spending is not "waste"; helps sustain stimulus]]''' [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "Let’s review some of the more silly arguments about the stimulus bill, starting with the notion that 'only' 75 percent of the money can be spent in the next two years, and the rest is therefore 'wasted.' As any economist will tell you, the economy tends to be forward-looking and emotional. So if businesses and households can see immediate benefits from a program while knowing that a bit more stimulus is on the way, they are likely to feel more confident that the recovery will be sustained. That confidence, in turn, will make them more likely to take the risk of buying big-ticket items now and investing in stocks or future ventures."
 +
 +*'''[[Argument: Much stimulus rightly goes toward long-term societal needs| Much stimulus rightly goes toward long-term societal needs]]''' [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] - "what's striking is that supposedly intelligent people are horrified at the thought that, during a deep recession, government might try to help the economy by buying up-to-date equipment for the people who protect us from epidemics and infectious diseases, by hiring people to repair environmental damage on federal lands and by contracting with private companies to make federal buildings more energy-efficient."
 +
 +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
====Con==== ====Con====
-*'''Tax cuts provide better economic stimulus than spending.''' Jason Furman and Douglas Elmendorf of the Brookings Institution wrote, "Fiscal policy implemented promptly can provide a larger near-term impetus to economic policy than monetary policy can."[http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953]+*'''[[Argument: 2009 US stimulus lacks short-term spending for immediate stimulus| 2009 US stimulus lacks short-term spending for immediate stimulus]]''' [http://www.planetizen.com/node/37060 John Norquiest. "Stimulus to Nowhere". Planetizen. January 22, 2009] - "Spending projects will take years to get under-way. Is "Shovel-Ready" Enough? State bureaucracies claim to have thousands of "shovel-ready" projects. But examining the list of 'shovel ready' state projects at aashto.org you find a list of decades-old freeway expansion proposals, large-scale projects that according to FHWA estimates, only 27% will be under construction within a year . Intimately familiar with the realities of transportation funding deployment, the nonpartisan Congressional Budget Office offered cautionary advice to the Appropriations Committee on just this point."
|- |-
|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"| |colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +===Good/bad stimulus: Does the stimulus package contain mostly "good" stimulus? ===
 +
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 +
 +*'''[[Argument: Almost all government spending has some stimulus effect| Almost all government spending has some stimulus effect]]''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "Although one can debate the necessity or importance of various projects, almost any new spending will have a stimulative effect - including resodding the National Mall."
 +
 +*'''[[Argument: Stimulus funding for unemployed ensures immediate spending| Stimulus funding for unemployed ensures immediate spending]]''' [http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009]: "this plan will provide for extended unemployment insurance, health care and other assistance for workers and families who have lost their jobs in this recession. [...] That will mean an additional $100 per month in unemployment benefits to more than 450,000 Indiana workers, extended unemployment benefits for another 89,000 folks who've been laid off and can't find work, and job training assistance to help more than 51,000 people here get back on their feet. [...] That is not only our moral responsibility - to lend a helping hand to our fellow Americans in times of emergency - but it also makes good economic sense. If you don't have money, you can't spend it. And if people don't spend, our economy will continue to decline."
 +
 +
 +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
 +
 +*'''[[Argument: Stimulus lacks important tax cuts for wealthy/businesses| Stimulus lacks important tax cuts for wealthy/businesses]]''' [http://online.wsj.com/article/SB123396623933859023.html "The Stimulus Tragedy". Wall Street Journal (editorial). February 6, 2009] - "Some Democrats claim these transfer payments are stimulating because they go mainly to poor people, who immediately spend the money. Tax cuts for business or for incomes across the board won't work, they add, because those tax cuts go disproportionately to "the rich," who will save the money. But a saved $1 doesn't vanish from the economy, unless it is stuffed into a mattress. It enters the financial system, where it is lent to others; or it is invested in the stock market as capital for businesses; or it is invested in entirely new businesses, which are the real drivers of job creation and prosperity. [...] At the current moment, amid a capital strike, the latter is the kind of fiscal stimulus we really need. Yet there is virtually none of it in the bills now moving through Congress. Senate moderates may succeed in cutting $100 billion or so in spending from the bill, which is political window dressing. Even they aren't talking about adding the kind of tax cuts that would really help the economy now."
-===Write Subquestion here...=== 
|- |-
-|WRITE SUBQUESTION BETWEEN "=== ===" width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"| +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +==="Pork": Does the stimulus contain little or substantial "pork"?===
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
====Pro==== ====Pro====
-''Click on the pencil icon and research and write arguments here'' 
 +*'''[[Argument: Only a small fraction of the stimulus is "pork"| Only a small fraction of the stimulus is "pork"]]''' [http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "Nor is it true, as some critics would have you believe, that the plan is a farrago of fiscal fat that will be all sizzle and no steak. Yes, there are some questionable items, but they are only a small fraction of the proposals."
 +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
 +*'''[[Argument: 2009 US stimulus has too much pork and wasteful spending| 2009 US stimulus has too much pork and wasteful spending]]''' [http://www.cnn.com/2009/POLITICS/01/16/cantor.stimulus/ Representative Eric Cantor. "Commentary: Big risk in Obama's economic stimulus plan". CNN.com. January 18, 2008] - "with such a free hand over current stimulus efforts comes great danger. Costing at the very least a hefty $825 billion, the plan's potential for taxpayer waste and special-interest-driven giveaways is enormous. [...] Like bears sniffing out food at a campfire pit, those looking for a piece of the multi-billion dollar pie have flooded Washington with a cascade of requests, some capable of spurring immediate and lasting growth, others falling hopelessly short."
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +===Infrastructure: Is significant spending on infrastructure appropriate? ===
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 +*'''[[Argument: Stimulus wisely creates jobs to help fix/update roads| Stimulus wisely creates jobs to help fix/update roads]]''' [http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009] - "it's not just the jobs that will benefit Indiana and the rest of America. It's the work people will be doing: Rebuilding our roads, bridges, dams and levees. Roads like US 31 here in Indiana that Hoosiers count on, and that connect small towns and rural communities to opportunities for economic growth. And I know that a new overpass downtown would make a big difference for businesses and families right here in Elkhart."
-|WRITE CONTENT FOR THE "Pro" BOX ABOVE THIS CODE width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top: 0.5em;"| 
-====Con==== +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
-*'''The New Deal did little to nothing to end the Depression.''' [http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953 James Glassman. "Stimulus: A History of Folly". Commentary Magazine. March 2009] - "Despite Franklin Roosevelt’s aggressive spending, unemployment reached 25 percent in 1933, fell only to 14 percent by 1937, and was back up to 19 percent in 1939.1 In the end, the New Deal did little or nothing to resuscitate the economy. Certainly, inept monetary policies helped prolong the Great Depression, as did tax increases, constant interventions in the conduct of business, and the erection of global trade barriers, beginning with the Smoot-Hawley Tariff in 1930, more than two years before Roosevelt took office. There was a stretch of twelve years from the stock-market crash to Pearl Harbor, and, during that time, fiscal stimulus simply did not jump-start the economy (or, in Keynes’s own metaphor, “awaken Sleeping Beauty”)."+*'''[[Argument: US stimulus spends too much on roads and bridges| US stimulus spends too much on roads and bridges]]''' [http://www.slate.com/id/2207920/ Eliot Spitzer. "Robots, Not Roads". Slate. Jan. 5, 2009] - "The 'off the shelf' infrastructure projects that can be funded immediately and provide immediate demand-side stimulus are almost by definition not the transformative investments we really need. Paving roads, repairing bridges that need refurbishing, and accelerating existing projects are all good and necessary, but not transformative. These projects by and large are building or patching the same economy with the same flaws that got us where we are. Our concern should be that as we look for the next great infrastructure project to transform our economy, we might rebuild the Erie Canal and find ourselves a century behind technologically."
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +===Consequences: What are the consequence of no stimulus? ===
|- |-
-|WRITE CONTENT FOR THE "Con" BOX ABOVE THIS CODE colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top: 0.5em ;"|+|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 +*'''[[Argument: Stimulus is better than consequences of no stimulus| Stimulus is better than consequences of no stimulus]]''' [http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009] - "The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression. Economists from across the spectrum have warned that if we don't act immediately, millions more jobs will be lost, and national unemployment rates will approach double digits. More people will lose their homes and their health care. And our nation will sink into a crisis that, at some point, we may be unable to reverse."
 +
 +:[http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/06/a_large_stimulus_bill_for_large_problems/ Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009] - "No one is going to get exactly what they want, but getting nothing is a far, far worse outcome. It would be an act of extreme national stupidity not to enact a big stimulus bill at this point."
 +
 +*'''[[Argument: US stimulus must be passed immediately to avoid greater crisis| US stimulus must be passed immediately to avoid greater crisis]]''' [http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009] - "I can tell you with complete confidence that endless delay or paralysis in Washington in the face of this crisis will bring only deepening disaster. [...] We've had a good debate. Now it's time to act. That's why I am calling on Congress to pass this bill immediately. Folks here in Elkhart and across America need help right now, and they can't afford to keep on waiting for folks in Washington to get this done."
 +
 +
 +
 +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
 +
 +*'''[[Argument: Allowing recession will enable stronger economic recovery| Allowing recession will enable stronger economic recovery]]''' [http://www.etaiwannews.com/etn/news_content.php?id=860089&lang=eng_news&cate_img=83.jpg&cate_rss=news_Politics Amity Shlaes. "Obama's gift to GOP is challenge to supply siders". Bloomberg. February 9, 2009] - "Cut the tax rate on capital gains to 5 percent. Halve the corporate tax rate. Fund a new, super-strong Securities and Exchange Commission to monitor anything that's traded, including the haziest derivative. [...] Buy homeowners out of mortgages they can't afford, and protect the rights of lenders. Make Social Security solvent by curtailing the annual growth in benefits. Forget one "S" word, stimulus, and learn to use two "R" words -- rent and recession. [...] Too costly, you might say, or too extreme. But the ideas above are neither costlier nor more extreme than the almost- trillion-dollar stimulus package moving through Congress. And they are more likely to bring long-term growth than the legislation advanced by President Barack Obama."
 +
 +*'''[[Argument: Stimulus may not work; unacceptable gamble with $1 trillion| Stimulus may not work; unacceptable gamble with $1 trillion]]''' Martin Feldstein, chairman of the Council of Economic Advisors under Ronald Reagan, wrote in January 2009, "It is of course possible that the planned surge in government spending will fail. Two or three years from now we could be facing a level of unemployment that is higher than today and that shows no sign of coming down."[http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953]
 +
 +*'''[[Argument: Fear-mongering on consequences of no US stimulus is wrong| Fear-mongering on consequences of no US stimulus is wrong]]''' [http://thehill.com/david-keene/from-hope-to-doomsday-2009-02-09.html David Keene. "From hope to doomsday". The Hill. February 9, 2009] - "There is no denying the seriousness of the current recession, but the specter of a still-popular president on television night after night to predict that things are going to get much, much worse is not something one would call confidence-inspiring. One can lead by inspiring or by trying to scare the heck out of people. In our country, at least, successful presidents have used the inspirational approach — the approach that Mr. Obama took during his campaign, but which he seems to have abandoned."
 +
 +
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +===Debt: Is adding to debt to stimulate the economy justified? ===
 +
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 +
 +*'''[[Argument: Adding to debt/deficit to fight recession is justified| Adding to debt/deficit to fight recession is justified]]''' [http://belfercenter.ksg.harvard.edu/publication/18805/case_for_fiscal_stimulus_in_us.html Martin Feldstein. "The case for fiscal stimulus in U.S." The Korea Herald. February 3, 2009] - "Under normal circumstances, I would oppose this rise in the budget deficit and the higher level of government spending. [...] Now, however, increased government spending and the resulting rise in the fiscal deficit are being justified as necessary to deal with the economic downturn [...] When the recession is over, the United States and virtually every other country will have substantially higher debt-to-GDP ratios. At that point, it will be important to develop policies to reduce gradually the relative level of government spending in order to shift to fiscal surpluses and reduce the debt burden."
 +
 +*'''[[Argument: 2009 US stimulus can be paid for by more progressive taxes| 2009 US stimululs can be paid for by more progressive taxes]]''' [http://www.prospect.org/cs/articles?article=time_to_think_big Robert Kuttner. "Time to Think Big". American Prospect. February 10, 2009] - "Looking forward, we need a very different sort of economy, one that restores a balanced form of capitalism. At the core of this change is a long-term increase in public outlay, investing in areas vital to economic growth and social decency. Once the recession is over, this increase in public investment needs to be paid for with a more progressive tax system."
 +
 +
 +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
 +
 +*'''[[Argument: Stimulus increases debt, inflation, interest rates, harms economy| Stimulus increases debt, inflation, interest rates, harms economy]]''' [http://corner.nationalreview.com/post/?q=YWE0OGQyMzNiMjg4MGNkZDc1N2I1NzlkMzY2YTQ2NDE= David Freddoso. "The Case for No Stimulus". National Review. February 3, 2009] - "Every penny of such a package must be borrowed, because the government is already running a $1.2 trillion deficit this year and faces a $703 billion deficit for next year, according to the non-partisan Congressional Budget Office. The question, then, is whether the government can help the economy by spending money if it can only do so by first sucking that money out of the economy."
 +
 +:[http://www.thestreet.com/story/10462740/1/_msnh/opinion-why-the-stimulus-will-fail.html?cm_ven=MSNH&cm_cat=FREE&cm_ite=NA Christopher Grey. "Opinion: Why the Stimulus Will Fail". The Street. February 9, 2009] - "In fact, it will further destroy growth and jobs by fueling inflation and higher interest rates. The effect of the stimulus can be summarized best by reversing and paraphrasing Winston Churchill's famous statement regarding the Battle of Britain, 'Never in the field of human conflict was so much owed by so many to so few.'"
 +
 +*'''[[Argument: Spending got US into crisis, won't get it out| Spending got US into crisis, won't get it out]]''' Andrew Schiff, an investment consultant at Euro Pacific Capital said to Politico: "All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place."[http://www.politico.com/news/stories/0109/18068.html]
 +
 +
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
===Buy American: Is the "Buy American" provision justified?=== ===Buy American: Is the "Buy American" provision justified?===
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====Con==== ====Con====
-*'''Buy American provision will cause protectionism and depression.''' [http://washingtontimes.com/news/2009/feb/08/how-to-cause-a-depression/ "How to cause a depression". The Washington Times. February 8, 2009] - "Tucked within the economic stimulus bill the House passed last week was a clause requiring state and local public works agencies to buy American iron and steel for their reconstruction projects, and the Senate expanded it to all manufactured goods. It was modified slightly on Thursday as Senators had a second thought. If the nation is going to spend $43 billion to $100 billion on infrastructure revitalizing the civil engineering, architecture and construction industries, it sounded reasonable that the spending should also be used as a catalyst for other American products like U.S. Steel's steel, DuPont's plastics, 3M's chemicals and so on. But a brief history lesson will show them the folly of their ways.+*'''[[Argument: Buy American provision will cause protectionism and further harm| Buy American provision will cause protectionism and further harm]]''' [http://washingtontimes.com/news/2009/feb/08/how-to-cause-a-depression/ "How to cause a depression". The Washington Times. February 8, 2009] - "Tucked within the economic stimulus bill the House passed last week was a clause requiring state and local public works agencies to buy American iron and steel for their reconstruction projects, and the Senate expanded it to all manufactured goods. [...] a brief history lesson will show them the folly of their ways. [...] In 1929, in an effort to stimulate the American economy after the stock market crashed, Sen. Reed Smoot and Rep. Willis Hawley, both Republicans, used similar logic to create the Smoot-Hawley Tariff Act, raising tariffs on foreign goods to record levels. President Herbert Hoover signed the bill against the opposition of more than 1,000 economists and numerous business executives. The result was a trade war with Europe, which increased its tariffs on U.S. products. Ultimately, U.S. exports and imports decreased by more than 50 percent in a single year, transforming the recession into the Great Depression [...] But at least Smoot-Hawley left open the freedom to import, whereas what the leadership of the 111th Congress originally wanted to eliminate imports outright."
 + 
 + 
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +===Public opinion: Where does public opinion stand?===
 + 
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 + 
 +*'''[[Argument: A majority of Americans supported Obama's stimulus| A majority of Americans supported Obama's stimulus]]''' [http://www.huffingtonpost.com/2009/02/09/poll-obama-stimulus-effor_n_165206.html "Poll: Obama Stimulus Effort Backed By Huge Majority". Huffington Post. February 9, 2009] - "Sixty-seven percent of the American people approve of how President Obama's handling his efforts to pass an economic stimulus bill, as opposed to 48% for Democrats in Congress and 31% for congressional Republicans."
 + 
 +*'''[[Argument: Citizens voted for change reflected in 2009 US stimulus| Citizens voted for change reflected in 2009 US stimulus]]''' President Barack Obama - "The notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of health care, that we can somehow deal with this in piecemeal fashion and still expect our economy and our country to thrive. I reject those theories, and so did the American people when they went to the polls in November and voted resoundingly for change."[http://firstread.msnbc.msn.com/archive/2009/02/04/1780772.aspx]
 + 
 + 
 +|width="45%" bgcolor="#F2FAFB" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Con====
-:In 1929, in an effort to stimulate the American economy after the stock market crashed, Sen. Reed Smoot and Rep. Willis Hawley, both Republicans, used similar logic to create the Smoot-Hawley Tariff Act, raising tariffs on foreign goods to record levels. President Herbert Hoover signed the bill against the opposition of more than 1,000 economists and numerous business executives. The result was a trade war with Europe, which increased its tariffs on U.S. products. Ultimately, U.S. exports and imports decreased by more than 50 percent in a single year, transforming the recession into the Great Depression (yes, the Mississippi Valley drought of 1930 helped, too). But at least Smoot-Hawley left open the freedom to import, whereas what the leadership of the 111th Congress originally wanted to eliminate imports outright."+*'''[[Argument: American public is ambivalent about 2009 US stimulus plan| American public is ambivalent about 2009 US stimulus plan]]''' [http://spectator.org/archives/2009/02/06/unemployment-and-spending/print Brian Wesbury. "Unemployment and Stimulus". The American Spectator. February 6th, 2009] - "the American people are on board [with the stimulus plan] – sort of. 'They're all over the map,' said Andrew Smith, director of the University of New Hampshire Survey Center. 'The way I would characterize what the public view is they know something has to be done, they're not quite sure what should be done,' Smith said. [...] A national Diageo/Hotline Poll shows 54 percent of registered voters favor the more than $800 billion stimulus package backed by President Barack Obama even if it means increasing the federal deficit. [...] Yet when the same poll asked voters if they thought the package of spending and tax cuts would be spent and managed wisely, 14 percent said they were 'very confident' it would. Twelve percent said they were 'very confident' the stimulus package would be effective in turning around the economy. [...] For voters to hold such disparate views is not uncommon, said Elizabeth Theiss-Morse, a political scientist who studies public opinion and voter behavior at the University of Nebraska. [...] 'It's like people often have the desire for lower taxes and more government services,' she said."
 +
 +|-
 +|colspan="2" width="45%" bgcolor="#F2F2F2" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +===Bipartisanship: Is the bill sufficiently bipartisan? ===
 +
 +|-
 +|width="45%" bgcolor="#FFFAE0" style="border:1px solid #BAC5FD;padding:.4em;padding-top:0.5em;"|
 +====Pro====
 +
 +*'''[[Argument: 2009 US stimulus accommodates Republican tax-cutting views| 2009 US stimulus accommodates Republican tax-cutting views]]''' [http://www.realclearpolitics.com/articles/2009/02/country_needs_stimulus_not_bip.html Eugene Robinson. "Roll over the Republicans". Real Clear Politics. February 10, 2009] - "Obama's plan was criticized by some Democrats for including a heavy component of tax cuts; that's the Republican prescription that helped get us into these desperate straits, and voters made clear in November that it's time to try something else. But Obama and his economic team found that there were only so many "shovel-ready" infrastructure projects to fund, and while straightforward government spending packs a bigger stimulative punch, tax cuts would help to some degree. So, from the beginning, the plan accommodated Republican ideology."
 +
 +*'''[[Argument: 2009 US stimulus needs to be effective, not bipartisan| 2009 US stimulus needs to be effective, not bipartisan]]''' [http://www.realclearpolitics.com/articles/2009/02/country_needs_stimulus_not_bip.html Eugene Robinson. "Roll over the Republicans". Real Clear Politics. February 10, 2009] - "This is not, repeat not, a time for compromise. Meeting in the middle, which the Senate sees as its role in our democracy, renders the whole exercise potentially useless. If we don't get enough money into the economy, and if we don't do it soon, we risk wasting a king's ransom on a stimulus that's too puny to stimulate. [...] This is not an issue where the answer is to be found in the 'middle.' This isn't a matter of left, right and center, it's a matter of yes or no: Does the federal government try to get the economy moving again, or not?"
 +
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 +====Con====
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*[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009] *[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020503413.html Steven Pearlstein. "Wanted: Personal Economic Trainers. Apply at Capitol." Washington Post. February 6, 2009]
*[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/08/AR2009020801710.html Arlene Specter. "Why I Support the Stimulus". Washington Post. February 9, 2009] *[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/08/AR2009020801710.html Arlene Specter. "Why I Support the Stimulus". Washington Post. February 9, 2009]
- +*[http://belfercenter.ksg.harvard.edu/publication/18805/case_for_fiscal_stimulus_in_us.html Martin Feldstein. "The case for fiscal stimulus in U.S." The Korea Herald. February 3, 2009]
- +*[http://www.cnsnews.com/Public/Content/Article.aspx?rsrcid=42620 "Food Stamps Will Stimulate the Economy More than Tax Cuts, Pelosi Says". CNS News. January 28, 2009]
- +*[http://www.usnews.com/articles/opinion/2009/02/04/majority-of-us-likes-obama-economic-stimulus-plan.html "Majority of U.S. Likes Obama Economic Stimulus Plan". US News and World Report. February 4, 2009]
 +*[http://www.reuters.com/article/politicsNews/idUSTRE4BR1OW20081228 "Summers: Obama stimulus aimed at long term too". Reuters. Dec 28, 2008]
 +*[http://www.ft.com/cms/s/0/6d3d2010-f087-11dd-972c-0000779fd2ac.html "The US needs its stimulus now". Financial Times (Editorial). February 1, 2009]
 +*[http://www.nytimes.com/2008/12/01/opinion/01krugman.html?_r=5&ref=opinion Paul Krugman. "Deficits and the Future". New York Times. December 1, 2008]
 +*[http://blog.syracuse.com/opinion/2009/02/why_obamas_stimulus_plan_makes.html Timothy Bunn. "Why Obama's stimulus plan makes sense". The Post Standard, Syracuse. February 11, 2009]
 +*[http://firstread.msnbc.msn.com/archive/2009/02/04/1780772.aspx "Obama pushes stimulus; reminds he won". MSNBC. February 04, 2009]
 +*[http://www.realclearpolitics.com/articles/2009/02/country_needs_stimulus_not_bip.html Eugene Robinson. "Roll over the Republicans". Real Clear Politics. February 10, 2009]
 +*[http://www.realclearpolitics.com/articles/2009/02/we_cant_afford_to_wait.html Barack Obama. "We Can't Afford to Wait". February 9, 2009]
 +*[http://www.thenation.com/blogs/thebeat/406028?rel=hp_picks John Nichols. "More Bipartisanship, Less Stimulus". The Nation. February 7, 2009]
 +*[http://www.newsweek.com/id/183303 Daniel Gross. "Yes, We Can". Newsweek. February 5, 2009]
 +*[http://www.msnbc.msn.com/id/28590554/ "Obama: Stimulus will create 4.1 million jobs". MSNBC. January 10, 2009]
 +*[http://www.nytimes.com/2009/02/06/opinion/06fri1.html "Getting Tough in Washington". New York Times (editorial). February 5, 2009]
 +*[http://www.nytimes.com/2009/01/07/business/economy/07spend.html Louis Uchitelle. "Economists Warm to Government Spending but Debate Its Form". New York Times. January 6, 2009]
 +*[http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12066188 "In need of more Band-Aids". Economist. September 4th, 2008]
 +*[http://www.economist.com/opinion/displaystory.cfm?story_id=12773125 "Filling the hole". Economist. Dec 11th 2008]
 +*[http://www.cbsnews.com/stories/2009/01/13/business/main4718229.shtml "Bernanke: Obama Stimulus A Good First Step". CBS News. Jan. 13, 2009]
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*[http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953 James Glassman. "Stimulus: A History of Folly". Commentary Magazine. March 2009] *[http://www.commentarymagazine.com/viewarticle.cfm/special-preview-stimulus--a-history-of-folly-14953 James Glassman. "Stimulus: A History of Folly". Commentary Magazine. March 2009]
*[http://washingtontimes.com/news/2009/feb/08/how-to-cause-a-depression/ "How to cause a depression". The Washington Times. February 8, 2009] *[http://washingtontimes.com/news/2009/feb/08/how-to-cause-a-depression/ "How to cause a depression". The Washington Times. February 8, 2009]
 +*[http://www.forbes.com/2008/02/14/yaron-economy-regulation-oped-cx_ybr_0214yaron.html Yaron Brook. "To Stimulate The Economy, Liberate It". Forbes. February 14th, 2008]
 +*[http://www.cnn.com/2009/POLITICS/02/06/romney.stimulus/index.html Mitt Romney. "Commentary: Stimulate the economy, not government". CNN. February 6, 2009]
 +*[http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/ Stephen Dinan. "CBO: Obama stimulus harmful over long haul". Washington Times. February 4, 2009]
 +*[http://www.huffingtonpost.com/2009/02/09/is-stimulus-too-small_n_165076.html Ryan Grim. "Why the stimulus is too small". Huffington Post. February 9, 2009]
 +*[http://www.washingtonpost.com/wp-dyn/content/article/2009/02/02/AR2009020200827.html "McCain: stimulus bill has too much spending". Washington Post. February 2, 2009]
 +*[http://www.cnn.com/2009/POLITICS/01/16/cantor.stimulus/ Representative Eric Cantor. "Commentary: Big risk in Obama's economic stimulus plan". CNN.com. January 18, 2008]
 +*[http://www.nationaljournal.com/njmagazine/wealthofnations.php Clive Crook. "Protectionism And The Stimulus". National Journal. February 7, 2009]
 +*[http://online.wsj.com/article/SB123396623933859023.html "The Stimulus Tragedy". Wall Street Journal (editorial). February 6, 2009]
 +*[http://thehill.com/david-keene/from-hope-to-doomsday-2009-02-09.html David Keene. "From hope to doomsday". The Hill. February 9, 2009]
 +*[http://www.newsweek.com/id/182762?from=rss "Obama Ducks Hard Choices". Newsweek. February 2, 2009]
 +*[http://online.wsj.com/article/SB123423402552366409.html Kevin Murphy. "There's No Stimulus Free Lunch". Wall Street Journal. February 10, 2009]
 +*[http://spectator.org/archives/2009/02/06/unemployment-and-spending/print Brian Wesbury. "Unemployment and Stimulus". The American Spectator. February 6th, 2009]
 +*[http://online.wsj.com/article/SB123353276749137485.html Harold Cole and Lee Ohanian. "How Government Prolonged the Depression". Wall Street Journal. February 2, 2009]
 +*[http://pajamasmedia.com/blog/myth-government-spending-stimulates-the-economy/ Daniel Mitchell. "Myth: Government Spending Stimulates the Economy". Pajamas Media. November 21, 2008]
 +*[http://www.forbes.com/2009/01/22/stimulus-keynes-taxes-oped-cx_bb_0123bartlett.html Bruce Bartlett. "Does Stimulus Stimulate?. Forbes. January 23, 2009]
 +*[http://www.usnews.com/blogs/capital-commerce/2009/1/27/10-reasons-to-nix-the-stimulus-plan.html James Pethokoukis. "10 Reasons to Whack Obama's Stimulus Plan". US News. January 27, 2009]
 +*[http://www.foxbusiness.com/story/markets/industries/finance/governments-stimulus-plan-wont-arouse-consumer-spending/ Chuck Jaffe. "Government's Stimulus Plan Won't Arouse Consumer Spending". Fox Business. February 3, 2009]
*''Donald J. Boudreaux. "The foolishness of economic 'stimulus'". Christian Science Monitor. January 24, 2008'' *''Donald J. Boudreaux. "The foolishness of economic 'stimulus'". Christian Science Monitor. January 24, 2008''
*''Bernardo Lopez. "Upshot; Flaws in the Stimulus Plan". Business World. January 29, 2009'' *''Bernardo Lopez. "Upshot; Flaws in the Stimulus Plan". Business World. January 29, 2009''
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-==External links==+==See also==
 +*[[Debate: The state should never support failing businesses]]
 +==External links and resources==
*[http://online.wsj.com/article/SB123302200427018275.html "Voting 'No' on Stimulus". Wall Street Journal. January 28, 2009] *[http://online.wsj.com/article/SB123302200427018275.html "Voting 'No' on Stimulus". Wall Street Journal. January 28, 2009]
 +*[http://online.wsj.com/article/SB123318906638926749.html Rush Limbaugh. "My Bipartisan Stimulus". Wall Street Journal. January 29, 2009]
 +*[http://www.financialsense.com/fsu/editorials/charting/2009/0127.html Matt Geraghty. "Economic Stimulus or Economic Boomerang?". Financial Sense. January 27, 2009]
|} |}
-[[Category:United States]] 
[[Category:Economics]] [[Category:Economics]]
-[[Category:Legislation]] 
[[Category:Economic crisis]] [[Category:Economic crisis]]
 +[[Category:2008/2009 economic crisis]]
[[Category:Recession]] [[Category:Recession]]
 +[[Category:Government]]
 +[[Category:Government spending]]
 +[[Category:Capitalism]]
 +[[Category:Socialism]]
 +[[Category:Obama administration]]
 +[[Category:United States]]
 +[[Category:US politics]]
 +[[Category:US Congress]]
 +[[Category:US legislation]]
 +[[Category:US economy]]
 +[[Category:International politics]]
 +
 +[http://editingwritingservices.org/ dissertation editing]

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Is the 2009 US economic stimulus package a good plan to combat recession?

Background and context

Toward the end of 2008 and in the beginning of 2009, the United States and global economies began to experience widespread recession. Multiple actions were taken to stimulate the economy in early 2008, late 2008, and in the beginning of 2009.
In January 2009, President Obama proposed a roughly $800 billion stimulus package. In early February, both the US House of Representatives and Senate voted to pass modified versions of Obama's stimulus plan, called the American Recovery and Reinvestment Act of 2009. Throughout this period, the nation and world engaged in a vigorous public debate on the merits of the plan, highlighting key philosophical differences in the United States and societies around the world on economic and social theory.

Many questions have framed the debate. Can the government stimulate the economy? Or, is the government incapable of successfully intervening and managing the economy? What does history, particularly surrounding the New Deal's impact on the Great Depression, reveal about the capacity of large spending programs to help end recessions? Is the stimulus package the right size, or is it too large, or event too small? Is the emphasis in the stimulus on spending appropriate, or do tax cuts provide better stimulus and deserve greater emphasis? Are the right kinds of stimulus included in the package? Is it appropriate, for example, to include longer-term spending projects, or does this fail to provide immediate stimulus? Does the stimulus include too much "pork" and room for wasteful spending? What are the consequences of inaction? Would it result in the next depression? Or is the government powerless to help in any case? Might the stimulus actually make things worse by adding to the national debt? Is the Buy American provision appropriate, or will its "protectionist" elements exacerbate the recession? Do the balance of pros and cons favor voting yes and passing the stimulus bill?

See Wikipedia's article on the American Recovery and Reinvestment Act of 2009 for more background.

Contents

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Government stimulus: Is the government generally capable of stimulating the economy?

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Pro

  • 2009 US stimulus will create or save millions of jobs Barack Obama. "We Can't Afford to Wait". February 9, 2009 - "At [the] core [of the Recovery and Reinvestment Plan] is a very simple idea: to put Americans back to work doing the work America needs done. [...] The plan will save or create three to four million jobs over the next two years. But not just any jobs - jobs that meet the needs we've neglected for far too long and lay the groundwork for long-term economic growth: jobs fixing our schools; computerizing medical records to save costs and save lives; repairing our infrastructure; and investing in renewable energy to help us move toward energy independence. The plan also calls for immediate tax relief for 95 percent of American workers."
  • Stimulus will succeed with good management and supplemental action The right set of spending, management, and supplemental action can ensure that the stimulus is effective. The stimulus package itself is only one part of the equation. Ensuring against no-bid contracts, enforcing transparency, and efficiently administrating the rapid expenditure of funds is very important. In addition, it is important to simultaneously shore up the financial system with a plan to fix the housing market and thaw the credit market. All these things must be done in concert in order for the stimulus to be effective.


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Con

  • Economic stimulus by government intervention always fails Robert Higgs. "Instead of stimulus, do nothing - seriously". Christian Science Monitor. February 9, 2009 - "Hardly anyone [...] is asking the most important question: Should the federal government be doing any of this? [...] Federal intervention rests on the presumption that officials know how to manage the economy and will use this knowledge effectively. This presumption always had a shaky foundation, and we have recently witnessed even more compelling evidence that the government simply does not know what it's doing. The big bailout bill enacted last October; the Federal Reserve's massive, frantic lending for many different purposes; and now the huge stimulus package all look like wild flailing - doing something mainly for the sake of being seen to be doing something - and, of course, enriching politically connected interests in the process."
  • Stimulus spending violates principles of supply-side economics Yaron Brook. "To Stimulate The Economy, Liberate It". Forbes. February 14th, 2008 - "we must first recognize that the key economic activity that causes growth is not consumer spending but production. [...] Economic growth means an increase in the amount of wealth that exists in a country--and all wealth must be produced. [...] The focus of today's stimulus packages on consumer spending is therefore completely backward. Consumption is a consequence of production. This fact is ignored by the Bush plan [and Obama plan], which attempts to achieve prosperity through $100 billion in deficit-spending. Though this might bring the appearance of prosperity, in the same way that an unemployed man appears prosperous if he goes on a shopping spree with his credit cards, the reality will be the opposite."
  • Stimulus is from taxes or debt; injects no new money Stimulus package spends money by first taxing it out of the economy or borrowing it through bonds. Either way, the money injected is not "new" money, but taken from the economy, so adds no new wealth to the economy.


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Consumer confidence: Will the stimulus improve consumer confidence?

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Pro

  • Stimulus is good for consumer and market confidence. A stimulus package adds to consumer confidence by giving, at a minimum, the impression that things are going to be OK. As a result, it encourages businesses and consumers to spend more than they otherwise would, which has a positive effect on the economy.


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Size: Is the size of the stimulus package appropriate?

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Pro

  • Stimulus risks being too small not too large Robert Kuttner, co-editor of The American Prospect. - Stimulus "needs to be adequate to do the job. Eight hundred and twenty billion is about 2.5% of GDP. But the economy is sinking at the rate of five to six percent. So they may find out they have to come back and ask for more." Prominent economist Paul Krugman has also stated he believes that roughly $800b in economic stimulus is "too small".[2]
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Con

  • $800 billion stimulus is just too massive. A $800 billion stimulus package is the largest stimulus spending bill ever devised (although there have been some tax cuts that could be considered larger). For this reason, it should be viewed with great suspicion, and, at a minimum, the debate over the bill and areas of wasteful spending should done patiently. Rush such a large bill through Congress makes little sense.


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Growing government: Does US stimulus right/wrongly grow government?

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Pro

  • No evidence that stimulus supporters just want to grow government. While it may be true that some supporters of the stimulus have a hidden agenda to grow government, this is mere speculation, and to oppose the legislation merely on this basis would be to overlook the broader, legitimate arguments involved in the debate.
  • Government is good; growing government with stimulus is not bad. The idea that government is "bad" and that any growth in government engendered by the stimulus is subsequently "bad" is false. Government governs for the people and by the people. Unless one argues that the people are bad, government must be good. See Government is Good.com for an expansion on this argument.


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Con

  • Stimulus will be used to grow govt bureaucracy The spending in the stimulus will go toward many government programs, growing them so that they become a constant burden on tax payers and constraint for free markets. None of this is desirable, and this is why tax cuts are a better alternative; it provides stimulus without growing government, and in fact, shrinking government.
Mitt Romney. "Commentary: Stimulate the economy, not government". CNN. February 6, 2009 - "These are extraordinary times, and like a lot of Republicans I believe that a well-crafted stimulus plan is needed to put people back to work. But the Obama spending bill would stimulate the government, not the economy. [...] In the final analysis, we know that only the private sector -- entrepreneurs and businesses large and small -- can create the millions of jobs our country needs. The invisible hand of the market always moves faster and better than the heavy hand of government."
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Spending vs. tax cuts: Which provides a better economic stimulus?

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Pro

  • Spending provides more economic stimulus than tax cuts "Filling the hole". Economist. Dec 11th 2008 - "Tax rebates or tax cuts will get more money into consumers’ hands quickly, but in today’s environment much of that boost will simply be saved, as people plug the holes in their finances left by the collapsing values of their houses and retirement portfolios, or just pay off debts. If consumers are unwilling to spend, the best way for a government to boost demand is to spend more itself. One approach is to send large dollops of federal cash directly to America’s struggling states"
  • Americans voted for progressive thinking of 2009 US stimulus President Barack Obama - "The notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of health care, that we can somehow deal with this in piecemeal fashion and still expect our economy and our country to thrive. I reject those theories, and so did the American people when they went to the polls in November and voted resoundingly for change."[3]


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Immediate stimulus: Does the bill provide sufficient immediate stimulus?

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Pro

  • Majority of US stimulus is immediate to fight recession now. Jim Horney, director of federal fiscal policy for the Center on Budget and Policy Priorities - "The vast majority of what is in these two bills is pretty good stimulus."[5] This includes "automatic stimulators", such as unemployment benefits and food stamps, money that is typically quickly and fully spent. In addition, the majority of money will be spent within the first year of the stimulus package, providing more short-term, "good" stimulus to get the economy rolling quickly.
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Con

  • 2009 US stimulus lacks short-term spending for immediate stimulus John Norquiest. "Stimulus to Nowhere". Planetizen. January 22, 2009 - "Spending projects will take years to get under-way. Is "Shovel-Ready" Enough? State bureaucracies claim to have thousands of "shovel-ready" projects. But examining the list of 'shovel ready' state projects at aashto.org you find a list of decades-old freeway expansion proposals, large-scale projects that according to FHWA estimates, only 27% will be under construction within a year . Intimately familiar with the realities of transportation funding deployment, the nonpartisan Congressional Budget Office offered cautionary advice to the Appropriations Committee on just this point."


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Good/bad stimulus: Does the stimulus package contain mostly "good" stimulus?

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Pro

  • Stimulus funding for unemployed ensures immediate spending Barack Obama. "We Can't Afford to Wait". February 9, 2009: "this plan will provide for extended unemployment insurance, health care and other assistance for workers and families who have lost their jobs in this recession. [...] That will mean an additional $100 per month in unemployment benefits to more than 450,000 Indiana workers, extended unemployment benefits for another 89,000 folks who've been laid off and can't find work, and job training assistance to help more than 51,000 people here get back on their feet. [...] That is not only our moral responsibility - to lend a helping hand to our fellow Americans in times of emergency - but it also makes good economic sense. If you don't have money, you can't spend it. And if people don't spend, our economy will continue to decline."


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Con

  • Stimulus lacks important tax cuts for wealthy/businesses "The Stimulus Tragedy". Wall Street Journal (editorial). February 6, 2009 - "Some Democrats claim these transfer payments are stimulating because they go mainly to poor people, who immediately spend the money. Tax cuts for business or for incomes across the board won't work, they add, because those tax cuts go disproportionately to "the rich," who will save the money. But a saved $1 doesn't vanish from the economy, unless it is stuffed into a mattress. It enters the financial system, where it is lent to others; or it is invested in the stock market as capital for businesses; or it is invested in entirely new businesses, which are the real drivers of job creation and prosperity. [...] At the current moment, amid a capital strike, the latter is the kind of fiscal stimulus we really need. Yet there is virtually none of it in the bills now moving through Congress. Senate moderates may succeed in cutting $100 billion or so in spending from the bill, which is political window dressing. Even they aren't talking about adding the kind of tax cuts that would really help the economy now."


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"Pork": Does the stimulus contain little or substantial "pork"?

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Infrastructure: Is significant spending on infrastructure appropriate?

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Con

  • US stimulus spends too much on roads and bridges Eliot Spitzer. "Robots, Not Roads". Slate. Jan. 5, 2009 - "The 'off the shelf' infrastructure projects that can be funded immediately and provide immediate demand-side stimulus are almost by definition not the transformative investments we really need. Paving roads, repairing bridges that need refurbishing, and accelerating existing projects are all good and necessary, but not transformative. These projects by and large are building or patching the same economy with the same flaws that got us where we are. Our concern should be that as we look for the next great infrastructure project to transform our economy, we might rebuild the Erie Canal and find ourselves a century behind technologically."


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Consequences: What are the consequence of no stimulus?

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Pro

  • Stimulus is better than consequences of no stimulus Barack Obama. "We Can't Afford to Wait". February 9, 2009 - "The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression. Economists from across the spectrum have warned that if we don't act immediately, millions more jobs will be lost, and national unemployment rates will approach double digits. More people will lose their homes and their health care. And our nation will sink into a crisis that, at some point, we may be unable to reverse."
Scot Lehigh. "A large stimulus bill for large problems". The Boston Globe. February 6, 2009 - "No one is going to get exactly what they want, but getting nothing is a far, far worse outcome. It would be an act of extreme national stupidity not to enact a big stimulus bill at this point."


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Con

  • Allowing recession will enable stronger economic recovery Amity Shlaes. "Obama's gift to GOP is challenge to supply siders". Bloomberg. February 9, 2009 - "Cut the tax rate on capital gains to 5 percent. Halve the corporate tax rate. Fund a new, super-strong Securities and Exchange Commission to monitor anything that's traded, including the haziest derivative. [...] Buy homeowners out of mortgages they can't afford, and protect the rights of lenders. Make Social Security solvent by curtailing the annual growth in benefits. Forget one "S" word, stimulus, and learn to use two "R" words -- rent and recession. [...] Too costly, you might say, or too extreme. But the ideas above are neither costlier nor more extreme than the almost- trillion-dollar stimulus package moving through Congress. And they are more likely to bring long-term growth than the legislation advanced by President Barack Obama."
  • Stimulus may not work; unacceptable gamble with $1 trillion Martin Feldstein, chairman of the Council of Economic Advisors under Ronald Reagan, wrote in January 2009, "It is of course possible that the planned surge in government spending will fail. Two or three years from now we could be facing a level of unemployment that is higher than today and that shows no sign of coming down."[6]
  • Fear-mongering on consequences of no US stimulus is wrong David Keene. "From hope to doomsday". The Hill. February 9, 2009 - "There is no denying the seriousness of the current recession, but the specter of a still-popular president on television night after night to predict that things are going to get much, much worse is not something one would call confidence-inspiring. One can lead by inspiring or by trying to scare the heck out of people. In our country, at least, successful presidents have used the inspirational approach — the approach that Mr. Obama took during his campaign, but which he seems to have abandoned."


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Debt: Is adding to debt to stimulate the economy justified?

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Pro

  • Adding to debt/deficit to fight recession is justified Martin Feldstein. "The case for fiscal stimulus in U.S." The Korea Herald. February 3, 2009 - "Under normal circumstances, I would oppose this rise in the budget deficit and the higher level of government spending. [...] Now, however, increased government spending and the resulting rise in the fiscal deficit are being justified as necessary to deal with the economic downturn [...] When the recession is over, the United States and virtually every other country will have substantially higher debt-to-GDP ratios. At that point, it will be important to develop policies to reduce gradually the relative level of government spending in order to shift to fiscal surpluses and reduce the debt burden."


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Con

Christopher Grey. "Opinion: Why the Stimulus Will Fail". The Street. February 9, 2009 - "In fact, it will further destroy growth and jobs by fueling inflation and higher interest rates. The effect of the stimulus can be summarized best by reversing and paraphrasing Winston Churchill's famous statement regarding the Battle of Britain, 'Never in the field of human conflict was so much owed by so many to so few.'"
  • Spending got US into crisis, won't get it out Andrew Schiff, an investment consultant at Euro Pacific Capital said to Politico: "All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place."[7]


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Buy American: Is the "Buy American" provision justified?

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Pro

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Con

  • Buy American provision will cause protectionism and further harm "How to cause a depression". The Washington Times. February 8, 2009 - "Tucked within the economic stimulus bill the House passed last week was a clause requiring state and local public works agencies to buy American iron and steel for their reconstruction projects, and the Senate expanded it to all manufactured goods. [...] a brief history lesson will show them the folly of their ways. [...] In 1929, in an effort to stimulate the American economy after the stock market crashed, Sen. Reed Smoot and Rep. Willis Hawley, both Republicans, used similar logic to create the Smoot-Hawley Tariff Act, raising tariffs on foreign goods to record levels. President Herbert Hoover signed the bill against the opposition of more than 1,000 economists and numerous business executives. The result was a trade war with Europe, which increased its tariffs on U.S. products. Ultimately, U.S. exports and imports decreased by more than 50 percent in a single year, transforming the recession into the Great Depression [...] But at least Smoot-Hawley left open the freedom to import, whereas what the leadership of the 111th Congress originally wanted to eliminate imports outright."


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Public opinion: Where does public opinion stand?

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Pro

  • Citizens voted for change reflected in 2009 US stimulus President Barack Obama - "The notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of health care, that we can somehow deal with this in piecemeal fashion and still expect our economy and our country to thrive. I reject those theories, and so did the American people when they went to the polls in November and voted resoundingly for change."[8]


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Con

  • American public is ambivalent about 2009 US stimulus plan Brian Wesbury. "Unemployment and Stimulus". The American Spectator. February 6th, 2009 - "the American people are on board [with the stimulus plan] – sort of. 'They're all over the map,' said Andrew Smith, director of the University of New Hampshire Survey Center. 'The way I would characterize what the public view is they know something has to be done, they're not quite sure what should be done,' Smith said. [...] A national Diageo/Hotline Poll shows 54 percent of registered voters favor the more than $800 billion stimulus package backed by President Barack Obama even if it means increasing the federal deficit. [...] Yet when the same poll asked voters if they thought the package of spending and tax cuts would be spent and managed wisely, 14 percent said they were 'very confident' it would. Twelve percent said they were 'very confident' the stimulus package would be effective in turning around the economy. [...] For voters to hold such disparate views is not uncommon, said Elizabeth Theiss-Morse, a political scientist who studies public opinion and voter behavior at the University of Nebraska. [...] 'It's like people often have the desire for lower taxes and more government services,' she said."


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Bipartisanship: Is the bill sufficiently bipartisan?

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Pro


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Con

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Pro/con sources

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See also

External links and resources

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