Wednesday, July 8, 2009

Policy Proposal

OK, via e-mail I've discovered Senior Congressional Policy Advisers are among this blog's followers.

So, here's a serious proposal.

The issue is that the economy needs more stimulus, but a "Stimulus II" does not fit in to any easy political narrative for Dems or this President. The way to do it, then, would not be to do it as a "Stimulus II", but rather, as a "fiscal transfer program" for the states... Just an immediate transfer of $250-300 billion that the states can do what they want with, so that California can pay its IOUs immediately, and so Indianapolis does not have to public school spending for the inner city. The Center for Budget Priorities and Policies estimates that the ARRA did close about 1/3rd or more of many states budget shortfalls. How about closing the rest?

So, the marketing idea is to give it a name so boring newspapermen won't want to put it on the front page. The President can say, truthfully, that state and local budgets have gotten progressively worse in the past six months, and that the "balanced budget amendments" are the enemy of counter-cyclical policy, and are making the Feds job tougher, and that even Milton Friedman -- Milton Friedman! -- thought it dumb to balance budgets in the face of a downturn.

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