2009+Stimulus


 * Issue**: What should the federal government have done in early 2009 in response to the looming recession? (A good starting point for reading about what was actually done is [|Wikipedia's page on the ARRA].)


 * Positions / arguments**:
 * No Stimulus
 * Multiplier is less than one, which means a given amount of government spending crowds out even more private spending
 * Government spending is inefficient and often wasteful


 * Moderate stimulus focusing on tax cuts
 * Effects of stimulus are poorly understood, so a larger one is too risky
 * Recent estimates suggest the multiplier on tax cuts is larger than that on government spending


 * Moderate stimulus (~$1 Trillion over two years) using a mix of tax cuts and government spending
 * Politically feasible with potential for bipartisan support


 * Large stimulus ($2+ Trillion) focusing on government spending
 * Smaller stimulus will not decrease unemployment enough
 * Small effect of stimulus may make the stimulus politically unpopular
 * Multiplier on government spending is higher than that on taxes
 * Some of the stimulus's cost will be recovered as higher government revenues