The Key to Economic Stimulus Success ; Focus On Long-Term Growth, Not Short-Term Jobs
The Washington Times › February 09, 2009
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Summary
As the United States struggles through a recession, political leaders are hoping a "stimulus package" will save us. There is nothing wrong with the government trying to stabilize or even energize the economy. It is the reason we craft fiscal and monetary policies. The problem with most stimulus packages is that they usually don't work.
Unfortunately for elected officials, the Federal Reserve was created as an insulated and therefore independent agency. The president and Congress can pressure the Fed, but they can't make the Fed do anything. In addition, even if the Fed does take action, elected officials can't take any credit for the subsequent results. Politicians like to show the American people they are "doing something" and they can't do that in the realm of monetary policy. As a result, fiscal stimulus packages tend to win out over monetary ones.See the full content of this document
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The Key to Economic Stimulus Success ; Focus On Long-Term Growth, Not Short-Term Jobs
Most stimulus packages rely on public-works projects. It is common to hear presidents and congresses promising an economic package that will build new roads, bridges and infrastructure. It sounds good, ...
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