The stimulus problem.

Here's the problem with the Federal Stimulus bill passed in 2009.


OK, it's scary to run deficits.  But, the problem in the states is what people were talking about when they said that the 2009 federal stimulus package was too small and should have done more to help the states.  So now the states, which can't run deficits, are being forced to cut spending which further exacerbates the recession.  Here's Bruce Bartlett (link), Ezra Klein (link), and Paul Krugman (link) far more eloquent than I on the issue.

Count me as one of those people worried about a double-dip recession.  And no, I don't see how cutting government spending right now, with unemployment stuck around 10%, is going to make our economy better in the long-run.  I wish I did.  And no, I don't see how the current political environment is going to be supportive of a further stimulus plan.  And no, the mid-terms should make it harder, not easier, to fix the economy.


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