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Will There Be a Second Obama Stimulus Plan?

January 11, 2009 RSS Feed Print

Paul Krugman says Obamanomics leaves a big job undone:

Again, kudos to the team for producing such a clear, honest assessment. But the more I look at the report, the more I wonder why anyone in the Obama team thinks the plan is adequate. Here’s one way to look at it: R/B show the effects of the plan rapidly fading out during 2011. Yet at the end of 2011 the unemployment rate is still 6.3%. Meanwhile, the CBO estimates the natural rate, aka “full employment,” at just 4.8%. Why does the plan go away with the job undone?

Me: If Team Obama is right, I find it hard to believe they will let the Bush tax cuts expire at the end of 2010.

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Dr. Krugman is engaging in a very intellectually dishonest form of politics in which he uses his technical expertise to back up purely political writings he puts in the popular press. He is entitled to his opinion, but readers ought to keep in mind that what he places in the popular press is NOT the scholarly work that won the Nobel prize. Economists both conservative and liberal have done this (Milton Friedman wrote a series of editorials that were purely political once upon a time). There's nothing wrong with Dr. Krugman giving his opinion, but it cannot be equated with his Nobel prize-winning work. In any event, there is a lot of room for skepticism on what Krugman has been writing and the specter of inflation and deficits need to be kept in mind. Also, we also have the TARP, $350Billion still remaining, and depending on how that is used, the economy will be further stimulated. Caution is better at this point.

Joe C. of VA 12:03PM January 12, 2009

Will There Be a Second Obama Stimulus Plan?

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