The Fiscal Stimulus Pander

The New York Times has an article up today reporting on how various stripes of economist view the just-announced fiscal stimulus package.  What’s notable is that, though the critiques of the package differ wildly, nearly everyone agrees that what the package, as proposed by the House, is a political effort — not a substantive policy fix.  So on one hand, we get free-market advocates of the FreedomWorks stripe making statements like this:

The most fervent proponents of free markets criticized the plan as a damaging intrusion by government that incurs public debt for dubious subsidies.

“The economy is working these things out,” said David R. Henderson, a libertarian economist at the Hoover Institution at Stanford. “We’ve got the housing crisis and the subprime, and all these things take a while to settle. The government just doesn’t have the discipline to kind of let things work out.”

But others see through the plan too, even if they disagree on what it should (or should not) have done. You’ve got a Harvard economist calling it "inadequate," and an economist from the left-leaning Economic Policy Institute calling "a political choice, and a bad one."

That’s not to say that every single provision is awful.  As Heritage’s Rea Hederman points out, there are some strong, helpful tax breaks for business:

The best part of the agreement is tax cuts for businesses. “Bonus depreciation,” which allows companies to rapidly deduct qualified investment from their tax liability, makes new investment opportunities more profitable and attractive. This provision would increase business investment, which would create jobs and strengthen the economy.

But on the whole, the plan seems far designed to generate easy political goodwill than to actually create the conditions for long-term economic growth.

The Washington Post has most of the details of the plan here.