COMMENTS: Springtime Stimulus Prospects

The looming recession was Story of the Day again as President George Bush endorsed a fiscal stimulus for the economy that Chairman Benjamin Bernanke of the Federal Reserve Board called for yesterday. Both ABC and CBS led from the White House where Bush called for $150bn-or-so in a mixture of cash rebates for individuals and investment incentives for businesses. NBC did not assign a reporter to the President's plan, mentioning it only in passing. Instead it led with the final day of campaigning before Saturday's Republican Presidential primary in South Carolina.

Both CBS' Bill Plante and ABC's Martha Raddatz (embargoed link) predicted that individuals could expect an $800 check from the federal government this spring. Raddatz quoted the pledge by Treasury Secretary Henry Paulson that as soon as any legislation is passed "we are going to run like a bunny to get the relief out." On CBS, anchor Katie Couric--no Keynesian she--worried that $150bn package would double federal borrowing. It was a strange worry, since if the money came from tax revenues or from cutting spending elsewhere then its effect would not be stimulative. Plante set her straight: if the government "pumps it out, it does not bring it in in taxes. It just adds to the deficit."

Both CBS' Sandra Hughes and ABC's David Muir wondered whether the package would actually stimulate consumers to resume their contracting spending. Celebrity economist Ben Stein actually recommended on CBS' Hitting Home series that the rebates should not be used as planned: "One, if you have high interest rate credit card debt or installment debt pay that off. Two, if you can save it, save it. Three, if you absolutely have to spend it, buy something durable with it like a freezer, a refrigerator, a microwave oven." On NBC, Kerry Sanders surveyed the signs of a slowing economy in smalltown central Florida. Falling municipal revenues in Mount Dora, population 11,669, may mean that garbage collection will be cut back to once a week. That stinks, Mayor Melissa DeMarco told him: "It is very hot and very humid here."


You must be logged in to this website to leave a comment. Please click here to log in so you can participate in the discussion.