Economic Stimulus: A Matter of Perspective

Those who know me have heard me kvetching endlessly about the proposed economic stimulus package, and specifically, the idea that simply slinging money at the problem prove to be its solution. In particular, the money to be distributed to the average taxpayer is no bigger than what outgoing president George W. Bush gave out a year ago. We all know how well that turned out. It didn't help the economy one bit, and things actually worsened considerably.

Well, the latest issue of the New Yorker features a column by James Surowiecki, who, for my money, is one of the smarter financial columnists in the business. In "A Smarter Stimulus," he makes a convincing argument that Obama's plan actually is a pretty decent idea. Yes, the infusion of money to the taxpayers alone won't solve the problem, but the way in which the rebate will be distributed (in smaller, weekly increments rather than a lump sum payment) is a far better proposal because people view the former method as additional income to spend and the latter one as wealth that should be saved.

It's all a matter of perspective, and in an age when no one trusts the government to get anything right, we need people like Surowiecki to set the record straight.