It's time for stimulus (02/09/2009)

Is the Obama administration's economic stimulus plan absolutely the best thing to do?

We don't know.

But it looks like the best tool available at the moment, and the options are minimal.

Something like a trillion dollars of demand has disappeared from the U.S. economy, and if the only way to create that demand is via government spending, then so be it.

Economists aren't unanimous that this is the way to go, but the vast majority have indicated that what the economy needs at the moment is a jolt of demand, and that demand will come from a well-designed spending program.

Some have argued that even an inefficient spending program will get the economy moving.

But a more prudent approach would be to spend but spend as wisely as possible, that way we not only get an economic boost but we get things the country needs as well.

You could probably get a jolt to the economy if you spent $800 billion on chocolate and pizza, but you wouldn't have anything to show for it in the long run but a big debt and a spare tire around the middle.

The same money injected into the economy for things that actually make sense - increased energy independence, better schools, and the like - not only provides an economic boost; we also get something out of it.

The biggest weakness in the Republican emphasis on tax cuts at the moment is not so much philosophical as it is strategic.

Republicans believe, as a matter of faith, that tax cuts are a good thing.

But in the current circumstance - both nationally and internationally - it's likely that any tax cut would simply shift dollars into savings, rather than putting those dollars into consumption. And consumption - spending - is what the economy needs.

If you are now secure in your job, ask yourself this question: What would you do with a tax cut? Chances are, given the current uncertainty, you would put it in the bank or pay down debt.

Now, ask yourself the same question, imagining that you are down on your luck and out of work.

Chances are, you're going to spend those same dollars.

And, by spending them, you're more likely to get the economy moving again.

That, at its most basic level, is what the debate in Washington this week is about.

Will the Obama plan work? We're not sure, but there's no credible alternative on the table, and the time to act is now. - J.R.

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