The Stimulus: Too much and not enough

After I made some cautionary comments on the pending fiscal stimulus plan on a local television news program, a friend said that I “sounded like a Republican.” I never did find out whether this was intended as a compliment or a criticism. Regardless of her intent, I found her comment troubling. Should caution have a partisan label?

I despair that elected officials seem to remember only half of a course in economics. We get more-or-less balanced policy in normal times because they remember different halves. Republicans remember 18th Century political philosopher Adam Smith proclamation that competition can harness initiative and build a stronger economy—yet forget Smith’s injunctions against concentrations of economic power. In this crisis, Democrats remember 20th Century economist John Maynard Keynes’ observation that public spending can stimulate the economy—yet forget that what we spend our money on and the amount of debt we incur matters rather a lot.

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