As Republicans and Democrats in Congress negotiate the exact details of an economic stimulus package, that debate was mirrored today among the chief economic advisers to several of the major presidential candidates at a forum at the New America Foundation in Washington, D.C. While none of these plans will be enacted, at least not in full, each adviser claimed his plan shows the superior economic thinking of his respective candidate.
Austan Goolsbee, economic adviser to Sen. Barack Obama and a professor at the University of Chicago Graduate School of Business. Goolsbee stressed that Obama's plan, which is built around $250 tax rebates to workers that Goolsbee said could be deposited "overnight," meets the condition of immediacy that he said is necessary for a stimulus package to have any positive effect. If the recession did begin in the last quarter of 2007 as some economists speculate, any further delays in people receiving money would be too late to help, Goolsbee said.
Gary Gensler, senior adviser for Sen. Hillary Clinton and former under secretary of the treasury for domestic finance. Gensler said Clinton's plan demonstrates the candidate's unique understanding of the American middle class. "She has observed a disconnect between Washington policy and what she's heard on the campaign trail," he said. Clinton's plan consists of, in part, the establishment of a $30 billion emergency housing fund to mitigate foreclosures, $10 billion for unemployment insurance, and $30 billion in energy assistance.
Leo Hindery, John Edwards's senior economic adviser and managing director of InterMedia Partners. "John Edwards feels like Paul Revere without a horse," Hindery said, arguing that current economic problems are a product of deep-seated issues in the economy that Edwards has been drawing attention to since his first campaign in 2000. Specifically, Hindery said that the federal government has been too resistant to supporting regulations of financial markets and international trade. He said that Edwards would change the country's "regulation-adverse" attitude and try to implement regulation to deal with problems like excessive housing loans before crises occur.
Kevin Hassett, senior adviser to Sen. John McCain and director of economic policy studies at the American Enterprise Institute. Hassett argued that stimulus should be less about "getting money into people's hands" and more about dealing with problems in our economic "institutions" that pose threats to growth in the long term. He said that the academic research has found that most short-term stimulus packages do not work and that the only one that might have was the post-9/11 package that involved permanent tax cuts. For that reason, Hassett explained, the McCain plan, rather than focusing on a short-term stimulus, involves reducing corporate tax rates to maintain the country's position as an attractive place to invest.