Elizabeth Barrette (ysabetwordsmith) wrote,
Elizabeth Barrette
ysabetwordsmith
  • Mood: busy

Economic Swings

Here's an article about the stock-market swings and the less conspicuous but more serious issues elsewhere in the economy:

Paul Krugman | Let's Get Fiscal
Paul Krugman, The New York Times: "The Dow is surging! No, it's plunging! No, it's surging! No, it's ... Nevermind. While the manic-depressive stock market is dominating the headlines, the more important story is the grim news coming in about the real economy. It's now clear that rescuing the banks is just the beginning: the nonfinancial economy is also in desperate need of help."
Tags: economics, news
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  • 3 comments
carolf

carolf

October 19 2008, 13:56:54 UTC 12 years ago

Nobel-laureate Krugman is my economics hero.

He is the only voice right now saying what Husband and I have been saying for the past 2 decades, or so. You can't sustain an economy on consumer spending and financial instruments. Somewhere, somehow, you've got to actually produce something.

The next economic stimulus package I want to see would be:

1. Money to the states for infrastructure repair
2. Money to the states for green- and/or bio-technology research
3. A short-term waiver of payroll taxes -- for everyone, or for incomes below X amount.

yeah, yeah, I know. We already have massive deficits, thanks to an irresponsible administration that actually believed they could spend while reducing income. But, right now, our problem is one of lack of demand. We need to gear it up. Fast.

THEN it's time to roll out the investment encouragement (read: business tax breaks) for business actually engaged in producing a product, probably in particular fields (again, green and/or bio.)

But, neither Krugman nor I are Secretary of the Treasury. (In the latter case, Thank Ghod!)

I would *love* to have Krugman and Thomas Friedman in Treasury and State, respectively. I doubt either would accept, but a gal can dream ...
ysabetwordsmith

Hmm...

ysabetwordsmith

October 19 2008, 16:58:13 UTC 12 years ago

I agree completely that a vaporware economy is doomed to failure; worth without value is dangerous.

I like the general concept of your stimulus package, although I think it could be made a lot less expensive by offering perks other than cash: tax relief, government land or facilities, etc. Payroll tax relief would only help people on a payroll, though; the unemployed and self-employed are getting hit extra hard. I've been pleased to see a few things go through in support of that.
carolf

Re: Hmm...

carolf

October 20 2008, 15:28:11 UTC 12 years ago

By "money to the states" I mean money to the state governments to be used specifically for infrastructure repair and development. Expensive, yes. But someone has to do it, and it won't be any cheaper later.

Payroll tax relief certainly helps the self-employed. In fact, it helps them even more than the employed. Employees only pay 1/2 the tax; their employers pay the balance. Self-employed folks pay both halves. So employers (read: businesses), employees and the entrepreneurial sector all get helped. Immediately.

But yes, extending unemployment benefits should be in there, too. My understanding is that it was in the last one, which is why I didn't list it for the *nest* one.

As for your other ideas -- count me in. I just think they are things we should do as economic policy, not necessarily specifically as a stimulus. They are slower to work. Stimulus packages are supposed to put maximum money into circulation fast.