Obama stimulus a positive step

    President Barack Obama's administration put the centerpiece of its early agenda into play yesterday when the House voted 244-188 in favor of an $819-billion stimulus package meant to jump-start the nation's downtrodden economy.
    Whether or not the new plan will create three million new jobs over the next several years, as Obama said after the vote, remains to be seen. But one thing is clear: We are currently sitting at a macroeconomic crossroads in which the evidence for the success of a fiscal stimulus is ambiguous at best. And Pulitzer Prize-winning economists sit in both camps. There have been just two instances in which this type of stimulus has been tested — the United States during the Depression and Japan in the 1990s — and neither country emerged in the manner originally intended.
    While the debate over the impact of the New Deal has raged between Keynesian and non-Keynesian economists for decades, both of whom have logical opinions, the House did the right thing yesterday by passing the stimulus package. The economy has continued to deteriorate despite the Fed having cut interest rates to nearly zero, and this type of economic stimulus is one of the few tools still available to lift the country from the financial doldrums.
    The credit crunch has made it nearly impossible for most home and business owners to borrow, and this new package will enable the government to assist that kind of demand; the package is also intended to restore consumer confidence, which will in turn increase spending.
    Anti-stimulus economists are concerned the package will result in wasteful — and perhaps Democratically tinged — spending, while weighing down the economy in the future and taking away resources from the private sector. These concerns, though certainly founded, do not outweigh the potential benefits of the package. It's worth the risk.
    The 647-page package will use government spending at the national, state and local levels to immediately impact the economy. At the same time, temporary tax cuts will help households and businesses pay off debts and ultimately spend money, strengthening the private sector and restoring life back into the economy for the
long term.
    As such, Democrats hope to pass off the package to President Obama by Feb. 13 in order to get the ball rolling as soon as possible. It is possible the stimulus will not have the overwhelmingly positive results Keynesian economists are hoping for, but it's better than nothing.