“Passing a new growth package is our most pressing economic priority,” President Bush said recently, pressing Congress to agree to a stimulus package. Now he and Congress appear ready to enact a package of one-time tax relief and cash disbursements of some $168 billion, or about one percent of GDP.
This, I ask economists John Taylor and Ken Judd in this third segment of my interview with them, is a good thing, right?
To which they reply, shaking their heads and chuckling, as if dealing with a particularly slow child, “wrong.” In just five minutes, a fine lesson in the difference between economics and politics.
Note, by the way, that John Taylor is advising John McCain–and is utterly intent on making the Bush tax cuts permanent. Taylor frowns on the stimulus package in part because he fears it will endanger efforts to do so. A stimulus of dubious effectivness today, higher taxes tomorrow — and that, says this McCain man, ain’t the way to go.