A mere $700 billion just doesn’t cut it. New Jersey Governor Jon S. Corzine wants a $1 trillion stimulus, spread over two years.
“We must be bold — $1 trillion bold,” he writes in an editorial in The Washington Post.
The figure is large, he admits. But, if done wisely, it will be a good investment in the country’s long-term infrastructure, Corzine says.
The governor, a Democrat, recalls Franklin Roosevelt’s response to the Great Depression in the 1930s. Roosevelt called for “drastic means” and “bold, persistent experimentation,” Corzine recounts.
Although these times are not as bad as the Great Depression, millions have lost their jobs, health coverage and retirement savings, he says.
“People reasonably expect government to act boldly,” he writes.
The stimulus money should go to infrastructure, counter-cyclical programs, housing, education, block grants, and middle-class tax cuts.
One billion dollars spent on infrastructure can put 20,000 people back to work. Besides roads and bridges, that category includes airports, the energy grid, Internet technology, ports, public housing and schools.
Education block grants should get $250 billion, and state housing mortgage agencies should get money to attack the heart of financial meltdown by helping people restructure their mortgages and avoid foreclosures.
The middle-class should get a tax cut to boost spending and help incomes keep pace with inflation.
To help states, Washington should put at least $250 billion into counter-cyclical programs, putting more into state unemployment funds, Medicaid and other health programs, Corzine maintains.
The feds must work with states, county and municipal governments to distribute the stimulus, he argues. State and local governments have the pipelines to quickly pump funding in to the economy, he writes.
The stimulus proposal could range from $675 to $775 billion over two years, according to government insiders.
A stimulus should both boost short-term spending and investments in long-term infrastructure, according to Lawrence Summers, named to lead the White House National Economic Council.
“In this crisis, doing too little poses a greater threat than doing too much," Summers wrote in the Washington Post.
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