While only 22% of the first stimulus (of USD 792B) has actually been disbursed, the President seems to be considering an another stimulus package. According to the remark made on last Friday in the Rose Garden, Mr Obama's economic team is looking at ideas such as -
- additional investments in roads and bridges
- incentives for making buildings more energy efficient
- additional tax cuts for businesses to create jobs
- additional steps to increase credit to small businesses
- an 'aggressive agenda' to promote exports.
1. Investments for roads and bridges should have been maximised in the first stimulus. See 2.
2. NO MORE ENERGY EFFICIENCY. It is too much already. The President should consider re-allocating money in the first stimulus away from Mr Chu to roads and bridges.
3. Is this new hire tax credits/benefit? I think the economists in the administration are smart enough to advice the President how difficult it is to implement an effective tax credits for new hires.
4. This might be sensible thing to consider, if the administration does not care financial institutions' health.
5. Exports promotion... Good, if the President promotes trade in general - and if so, is this stimulus? and if not, White House might be thinking that the trade war can be stimulus.
The biggest question, however, is why the President had to talk about all these NOW. These measures will not do much for the economy in the short term other than adding to already-huge national debt. With the two defeats in the elections and unemployment data above 10%, the President might have thought that Congress might come up with something which would be difficult for him to oppose, further undermining his control (if any is left) on Congress, and that he needed to be ahead of the curve. Alas, he is already behind the curve, had he not thought about the possibility of this situation coming.
