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Thursday, January 08, 2009

Recession and Stimulus 101

Sometimes I just like to let the experts have a say on how the Obama administration should handle this economic crisis.

Step 1: Give money to states to prevent severe cutbacks in state spending.  Otherwise, any federal stimulus package is being offset by "50 Herbert Hoovers."

Step 2: Focus on government spending, rather than tax cuts or private spending.  Individuals are particularly likely in a recession to either save or pay down credit, which has no stimulus effect.  But every dollar of government spending is a dollar of economic stimulus.

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