Note: I began writing this before Matt posted his diary. Below, I look at the short-term problem of how to START spending the money quickly and effectively. Obviously, the long-term challenge is just as great. We have to do both.
Conservative hacks may still be attacking the New Deal, but GOP economists, not so much. Support for a massive stimulus is bipartisan now amongst economists, Bloomberg reports:
Calls for $1 Trillion Stimulus Package Grow as Economy Tumbles
By Rich Miller and Matt Benjamin
Dec. 4 (Bloomberg) -- The one thing that isn't shrinking in the U.S. economy these days is the size of the stimulus package that financial experts say is needed to turn it around.
With automobile sales dropping, payrolls plunging and manufacturing contracting, economists from across the political spectrum are raising the ante on how much the government should lay out. Some are now calling for at least a $1 trillion boost.
Kenneth Rogoff, a Harvard University professor who was an adviser to Republican presidential candidate John McCain, and Joseph Stiglitz, a Nobel Prize winner who served in President Bill Clinton's White House, are among those who say President- elect Barack Obama should push for a package of that size.
"They need a stimulus of $500-to-$600 billion a year for at least two years to counter what is going to be a collapse in consumption," said Rogoff, a former chief economist at the International Monetary Fund.
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