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A Secret, Second Stimulus Plan

By    |   Monday, 26 Oct 2009 08:24 AM

The government will create a second round of stimulus to follow February’s $787 billion of tax and spending goodies.

But will be “stealth” stimulus, spending and tax benefits enacted bit by bit, much of it extending measures from the February package that are set to expire, according to a report from CNNMoney.com.

The elements will likely include:

• An extension of unemployment benefits. Estimated cost: $2.4 billion.

• COBRA health insurance subsidy extensions. Estimated cost: $25 billion.

• Emergency payments to seniors to compensate for the lack of inflation adjustment additions to their Social Security benefits. Estimated cost: $13 billion.

• An extension of the homebuyer tax credit. Estimated cost: $16.7 billion.

• A job creation tax credit. Estimated cost: $27 billion.

That’s $84 billion all together.

Many experts say the stimulus measures already adopted will create enough harm in the form of a mushrooming debt burden and future inflation that the idea of more stimulus is simply ridiculous.

Allan Meltzer, one of the country’s foremost economic scholars, writes in The Wall Street Journal, “The United States is headed toward a new financial crisis. History gives many examples of countries with high actual and expected money growth, unsustainable budget deficits, and a currency expected to depreciate.”

“We will escape only if we act forcefully and soon,” Meltzer warns.

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The government will create a second round of stimulus to follow February’s $787 billion of tax and spending goodies.But will be “stealth” stimulus, spending and tax benefits enacted bit by bit, much of it extending measures from the February package that are set to expire,...
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2009-24-26
Monday, 26 Oct 2009 08:24 AM
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