Conservative economist Larry Kudlow says President-elect Barack Obama's huge stimulus plan is starting to look less typically Democrat and more like what Republican icon Ronald Reagan enacted as president in the 1980s.
"Ronald Reagan said government was the problem, not the solution. Dealing with a bad recession like this one, the Gipper lowered taxes and domestic spending,” Kudlow writes in his column.
“Obama on the other hand has offered an $800 billion package, with plenty of infrastructure spending that alleges to create three million jobs.”
Yet it’s interesting, he notes, to see just how much the Obama plan has changed since Election Day.
“The size has been roughly constant. But the mix of tax cuts and spending increases is now totally different," Kudlow says.
Rather than spending $100 billion on tax credits, Obama now is offering $300 billion worth of tax cuts. This includes a tax cut for business, more expensing for small-business investment, and a restoration of the five-year tax-loss carry-back, which will help banks and home developers.
"This might even result in tax refunds for businesses, and might also allow banks to rid themselves of toxic assets, since the losses will now be spread over many years," said Kudlow.
Kudlow says Obama’s economic have been bragging that the tax-cut package is very pro-growth. “And you know what? I acknowledge it. People like Larry Summers, Austan Goolsbee, Christy Romer, and Tim Geithner are no left-wing, big-government whackos," Kudlow writes.
The conservative drift of the stimulus plan is not being embraced by some economists, however.
Noted liberal economist Paul Krugman wants a much larger spending component for the stimulus proposal, he writes in his New York Times blog.
“This plan looks too weak," Krugman warns.
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