Bloomberg Dismisses Economic Stimulus Package

While a third party candidate has little chance, as a consequence of the poor choices offered by the major parties Michael Bloomberg has moved up to second in my rankings of potential 2008 candidates (with this subject to change between now and November). Bloomberg has dismissed the proposed economic stimulus package being considered with this criticism:

“There’s just one problem: It’s not going to make much of a difference because we’ve already been running huge deficits,” Bloomberg said. “If we spend all the money right now, and there is no recovery because of it, then we don’t have a second hand to play.”

Bloomberg has offered these suggestions:

Bloomberg argued that the government’s first goal should be to stop the bleeding in the housing sector. “What good is a rebate going to do for a family who’s about to lose the place that they sleep in?” he said. Keeping people in their homes, he added, “is more important than giving everyone a check.”

Instead, the mayor argued, the government should:

_ Adopt a capital budget to oversee long-term infrastructure spending, instead of the current year-to-year spending.

_ Offer financial counseling, modified loans and, in some cases, subsidized loans to homeowners who find themselves unable to afford their mortgages.

_Overhaul immigration laws to bring more workers in, not keep workers out.

“Illegal immigration has become the pandering politician’s best friend,” he said. “We have to stop turning away people that our economy needs.”

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4 Comments

  1. 1
    The Charters Of Dreams says:

    Better that the White House and Congress do absolutely nothing and let the Fed handle things with what limited and imperfect tools they have.

    Why?

    The definitive historical review of U.S. government responses to recession is Christina and David Romer’s 1994 NBER Macroeconomics Annual paper What Ends Recessions?” [$]: The Romers examine each U.S. recession from the end of World War II to the article’s publication date (that is, the recessions of 1954, 1958, 1960, 1970, 1975, 1980, 1982, and 1991) and determine what government actions were taken in response and how successful those actions were.

    Government response to recessions comes in three forms: monetary policy (the Federal Reserve’s Open Market Committee lowers interest rates to spur investment and borrowing), automatic fiscal policy (the automatic increase in government spending during recessions that results from increased unemployment insurance claims, welfare disbursements, etc.), and discretionary fiscal policy (the adoption of stimulus packages that contain increased government spending and/or tax cuts).

    The track records for both FOMC action and the automatic stabilizers are strong, the Romers show. Both kick in quickly when recessions begin, and the economy turns around fairly soon afterward.

    Stimulus packages have a much shoddier record, however: they take months to move through Congress, and additional months to implement — long after the recession has come and gone. Moreover, many of the specific actions initiated by stimulus packages are hardly stimulatory — extending unemployment benefits or launching major government construction programs requires several months to several years (and sometimes even decades) before the federal monies hit the economy.

    The Washington Post agrees that the White House and Congress should butt out and leave it to the Fed, at least for the time being . . .

  2. 2
    Bob Roth says:

    I agree. The country is ill and you can’t fix the flu with a band aid. Our problem is a lack of leadership. We’ll give you money because it will make you vote. Isn’t that a lot like giving us fish when we really need to figure out how to catch them ourselves. For a country that was built on innovation, there are sure a lot of people standing around with their hand out and an over-inflated expectation to get what they think is rightly theirs.

    Stop the madness.

    If I am going to vote for real change, then I want someone who understands how to run a business. I want someone who understands the economy. I want someone with leadership experience. I want someone that can build a team made up of the best minds, despite party affiliation, and provide direction for them to fix education, health care, immigration, social security, and the war.

    I believe that Mayor Bloomberg, a proven successful businessman and public servant, is the leader to help us rebuild our country.

    Please join me at draftbloomberg.com by signing the petition that will help convince Mayor Bloomberg to run for President of the United States.

  3. 3
    Ron Chusid says:

    Wait until after the major party’s choose their nominees. Bloomberg might look like more of a consideration then, depending upon who wins.

  4. 4
    Chris Hutcherson says:

    Families now owe as much as the entire U.S. economy can produce in a year, 100% GDP !

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