The Tao Of Lanny Davis
The Washington Post asked a bunch of economists and politicos to think through the implications of another stimulus this weekend. Some good stuff in there, which we'll get to in the next post. But first, a word to Lanny Davis:
"As a liberal Democrat," writes Davis, "I favor a new stimulus." I lean left too, but I favor stimulus because the economy needs an artificial shock to overcome the slump in demand, and I consider the dangers of prolonged recession to be larger than a small increase in national debt. It's not really a question of ideology.
But so be it. The weird bit comes a moment later, when Davis argues that we should fund an infrastructure program with "a surtax for everyone."
There are certain priorities that I could imagine meriting a broad-based new tax. Averting climate change, say. But a stimulus is meant to increase household spending, not impose further economic stress which would decrease household spending. The surtax might well cancel out the effects of the stimulus, or worse. Which Davis, to his credit, acknowledges. "I admit," he writes, "[It] seems to defy economic logic. But so far economic logic hasn't worked."
And that, dear reader, is by far the nuttiest thing I've read today. It's more like a zen koan than a commentary on the recession -- which has followed economic logic pretty precisely, with roaring consumption based on an unsustainable debt load eventually blowing up in everybody's face -- or the need for a third stimulus. It's not just doing by not-doing. It's doing by un-doing. And it suggests that Davis is playing on a whole other mystical level here. He's like the Dr. Strange of economic commentary.
Posted by: rt42 | July 13, 2009 12:35 PM | Report abuse
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