A stimulus plan during a recession is supposed to stimulate the economy with a minimal amount of side effects. It must do so quickly if it is to be a practical stimulus.
That is why a quick tax cut on all income always works, Why tax cuts on capital gains always work. Why corporate tax cuts are tremendous boosts to an overall depressed economy.
These are all job generators. Experience shows they work FAST.
Furthermore, they do not change the country’s political and social infrastructure. They do not provide political payoffs.
A stimulus is NOT supposed to promote voter turnout years from now, or change the form of government years from no. It may cause inflation for our children and grandchildren. Yes: Subsequently, It may stimulate the economy years from now.
To some politicos, they may well impersonate a stimulus with the hope of being the remedy. They are a political opportunity.
But a waste of lots of money.
The upshot of all this? We will suffer an even deeper recession. To now, only a small fraction of stimulus funds have been spent, with most earmarked a year or two down the road. What we get will be late and only add to upcoming inflation.
Remember the Soviet Union with its periodic Five Year Plan Stimulus efforts? When did they ever work?
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