Fasten Your Seatbelts for the Jobless Recovery...
Spencer Ackerman's Sober, Measured Take on John Yoo

In Which Douglas Holtz-Eakin Suffers a Relapse...

McCain economic advisors on the desirability of a second stimulus:

Topic A -- Do We Need Another Stimulus?:

MARK ZANDI, Chief economist at Moody's Economy.com:

It is premature to conclude one way or another if the economy needs another dose of fiscal stimulus. The current stimulus has not had a sufficient opportunity to work, and while it has already provided some benefit to the economy -- the downturn would be even worse without it -- its benefit won't be fully felt until later this year. A reasonable judgment regarding the need for more stimulus should wait until year's end. Planning now for another round of stimulus is prudent, though, given that the economy remains in an extraordinarily severe downturn and the risks are decidedly to the downside. If additional stimulus is needed, then it probably should include more aid to hard-pressed state governments... more aid to stressed households hammered by what will be double-digit unemployment, an expansion of the housing tax credit to stem the ongoing slide in house prices, a delay in legislated increases in marginal personal tax rates in 2011, and perhaps even a payroll tax holiday...

DOUGLAS HOLTZ-EAKIN, Former director of the Congressional Budget Office; senior economic adviser to Sen. John McCain's presidential campaign:

The very call for another "stimulus" reflects a fundamental misconception that the economy can be managed -- and the unemployment rate targeted -- for political objectives. Throughout the 1960s and 1970s this was tried to no avail.... The hallmark of the current downturn has been asset market collapses.... No amount of Keynesian "stimulus" will replace roughly $12 trillion in lost wealth and lead to a sustained consumer recovery.... Begin by doing no harm -- ditch the anti-competitive Obama international tax hikes and the expensive and disruptive health-care mandates that are looming. If the politics require, that could be combined with a payroll tax holiday that frees up cash flow for investment spending, improves employment incentives and acts right away...

Listening to Holtz-Eakin, you would not know that governments have been managing their economies by pulling levers to affect aggregate demand since 1825...

Looks like the political virus he caught while working for the McCain campaign is going to be permanent...

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