JONATHAN COHN SEPTEMBER 30, 2011
The new Republican argument against economic stimulus, I see via Jonathan Chait, is that it would simply give the economy a “sugar high.” I actually think that's a useful analogy, although I'd take it a bit further. What the economy really needs right now is a shot of Red Bull.
Look, it’s true the economy faces some serious, long-term problems. Wages for the non-affluent have been stagnant, while the government’s future spending commitments far exceed its expected revenue, potentially producing a large drag on the economy. But right now we’re also suffering from an acute, short-term crisis: The economy is recovering from the 2008-2009 recession very, very slowly. And, yes, the word "crisis" is appropriate. Millions of people are out of work, lack the money to pay their bills, and so on.
According to most mainstream economists, the ideal policy response would be to address both sets of problems, with temporary measures to boost growth and permanent measures to reduce the deficits. And the economists tend to agree about what the short-term help should look like: Some combination of public works spending, well-crafted tax cuts, and aid to the states.
In other words, the ideal plan would call for a shot of Red Bull now, so that the economy gets a burst of energy, and then a steady regimen of fresh produce plus exercise, so that the economy is fit for the long term. Generally speaking, this is what President Obama's jobs plan would do.