Martin Feldstein’s opposition to a Democratic Stimulus Bill wouldn’t normally be a big surprise, given his background as a conservative economist and advisor to President Reagan. But he’s been trotted out a lot recently for his support of the Obama plan. So it caught my eye when I saw his editorial in today’s Post coming out in opposition to the bill in its current form.
I’m not saying I agree with him. Actually there are a number of points I definitely disagree with him on. The points on capital gains taxes don’t add up to me. And he makes what strikes me as a poor argument that we should concentrate a lot of the spending on retooling and repairing the military after five years or war because the military is capable of much more rapidly doing procurement and getting new projects underway.
In terms of speed that may well be right. It sounds logical to me, though I don’t know myself. But one of the key fringe benefits of this vast spending has to be to make investments that will create greater efficiencies and possibilities for sustained growth in the future. New green energy stuff, transportation infrastructure, etc. Most military spending — whatever the merits in national security terms — just doesn’t get you that. At least not in any way I can see.
All that said, though, his critique is nothing like the Republican claptrap we’ve been hearing over recent days. In fact, in some respects it’s like stuff I’ve been hearing from Democrats. He’s critical of most of the tax cuts — judging them either inefficient as stimulus or just lump sum payments to businesses that are unlikely to reinvest it in a down economy . And he thinks the kinds of spending are not sufficiently targeted to maximize employment and spending into the economy. It’s worth a read.