Is there more consensus on (some) stimulus than we think?
At first glance, David Brooks and Paul Krugman have released precisely opposite columns over the past few days. Krugman's Sunday effort blasted the Senate for failing to pass further stimulus in the form of unemployment benefits. "We’re facing a coalition of the heartless, the clueless and the confused," he lamented. Brooks's column is an effort to punch holes in the case for stimulus. "Debt-fueled government spending doesn’t increase confidence," he writes. "It destroys it."
But if you actually look at their prescriptions, they are, in this case, similar. Krugman wants to see unemployment benefits extended. So, it turns out, does Brooks. "Extend unemployment insurance," he recommends. "That’s a foolish place to begin budget-balancing." He goes on to argue for a program that would "mitigate the pain caused by the state governments that are slashing spending" by tying state and local aid to the passage of state budgets that make long-term sense -- but notice that he's recommending state and local aid.
Now it may be that a retrenchment to state and local aid and unemployment insurance represents a tremendous defeat for those of us who believe the economy needs help. But getting passage of both -- and quickly -- would also be a huge help to the economy. If you can't do much more on stimulus, maybe you can at least mitigate some of the pain and prevent some of the most predictable sources of economic contraction.