Thursday, December 20, 2001
Well Congress will do no more damage for the remainder of the year. They recessed today after having failed to pass a economic stimulus bill.
I'm not sure that this wasn't necessarily a good thing. I think the economy is beginning to rebound without the bill.
The whole stimulus bill fight wasn't about giving the economy a kick in the pants. It was about politcs.
Republicans wanted the bill so that they could say they were doing something about the economy.
Democrats wanted to stop the bill so that if the economy doesn't improve, they can blame the Republicans for the bad economy in the 2002 elections.
Both sides also are making some mistakes on this whole issue.
The Republicans were stupid to put in a repeal of the Alternative Minimum Tax. The AMT does need some tweaking, because it is starting to affect some middle-class people who weren't the original targets of the legislation. But repealing the tax looks like a windfall for the rich and corporations, because it is.
The Democrats were being stupid because the main argument they were making on this stimulus bill was that there needed to be more help to unemployed workers and less to corporations. This is certainly a typical compassionate Democratic argument, but the best thing you can do for unemployed workers is to create jobs for them. Sure, extend unemployment benefits, but don't call it stimulus. It doesn't stimulate anything.
Of course, I'm not really sure you want to ignore corporations when you're trying to stimulate the economy. Anything you can do to get corporations to grow and invest will create jobs. Giving people tax breaks helps on the demand side of the equation, but giving companies more money to spend on R&D also creates jobs.
So the stimulus package died. The economy will roll on.