Half-a-Loaf Stimulus

by NANCY CLEELAND

[posted online on February 13, 2008]

The $168 billion stimulus package signed by President Bush today will provide a needed boost to a struggling US economy. The size and timing are right. Unfortunately, however, the Administration and its Congressional allies rejected the consensus opinion of economists and insisted on provisions that make the package about half as effective as it could have been. Those shortcomings should be addressed in a follow-up plan built on sound economic reasoning, rather than political favors and ideology.

First, the good news: the bulk of the money will flow directly to low- and middle-income Americans in the spring or early summer. They will receive checks ranging from a few hundred to several thousand dollars, depending on family size and income. Not all of this money will find its way directly into the economy--as much as half may be socked away in savings or used to pay off debt--but what is spent will help preserve jobs and slow the economy's accelerating downward spiral.