Feldstein's nothing but a fucking socialist!

"Keynes! Calling Mr. John Maynard Keynes!"

Infrastructure spending is really a twofer, in that so much of it badly needs to be replaced in any case. So I'm glad that Obama speaks of it as one of his priorities.

And where on this "Fiscal Bang for your Buck" scale does recapitalizing banks in exchange for warranties fit?

Sadly, all the facts in the world will not affect those who have drunk the koolade of supply side economics. They exist in their own reality, chanting "There is no faith but Conservatism and Ronal Reagan is its prophet!"

"The capitulation of the American consumer", what a phrase! Like the consumers had a choice.

Consumers only kept spending because so many people took the equity out of their homes with HELOC's.

Now those are drying up and the banks are lowering the credit lines to match the new value of the homes.

Only government funded infrastructure improvements (much needed, as Steve noted), plus some more money in consumers pockets, can right this ship.

It'd also be nice if the financial rules were changed back so this can't happen again anytime soon.

Jim Jubak at MSN has been on this for a good month, saying Bernanke/Fed are creating a new bubble.

Raising the income baseline on AMT -- without paying for it -- was one of the worst parts of the bailout package.

I don't see "Across the board tax cuts" anywhere in the Permanent column. Seems to me this would generate the biggest multiplier effect, as people would be more apt to spend money they would consider permanent income.

Across the board tax cut when we have a Federal deficit of 10 trillion dollars is shear idiocy.

A positively Bushian suggestion.

Small but not entirely unimportant nitpick: the interest rate that the fed controls is the nominal interest rate, not the real one. When inflation is at, say, 5%, when you lend a dollar and get $1.05 back in a year, the nominal rate may be 5%, but the real interest rate is zero, because after inflation that $1.05 buys you exactly the same as a dollar a year ago.

So in fact US real interest rates are significantly negative, and have been for some time. (As they were during much of the economic doldrums of the 70s.)

It's funny that Krugman et al don't mention that, but they like to avoid sprading panic.

The technical definition of a liquidity trap is that there is nothing useful to do that requires investment.

Why does Jeff II think that Keynes was a "socialist"? His economics in the 1930s was actually aimed at saving capitalism. He clearly during WW2 wanted to help design an international economic system that would make the world safe for capitalism. All this is clear if you read any of the good books about Keynes, by Markwell, Moggridge, Skidelsky, or Harrod. It is a shame that the so-called (and in my view well-justified) "revival of Keynes" at the moment, and the reaction against this, isn't based on a fuller understanding of what he was actually about.

I like to point this out over and over. The top 4 "bang for buck" solutions are either too small in magnitude or too delayed in effect to be useful RIGHT NOW.

The best solution we have at this moment is the suspension of payroll taxes.

I like infrastructure - it is great long term stimulus, and we should aggressively pursue an infrastructure plan. That said, we need stimulus today, not in q2-q3 2009.

A payroll tax holiday is the best way to get our of our current crisis.

If interest rates are 0%, we might see rates as low as 4%.

Does it frustrate anyone ELSE that those charged with circulating capital can't do this for less than 4% before you and I can see a dime?

At 1% I might well be tempted to bankroll my small business for major expansion and hire a half dozen technicians.

I'm not doing that at the 6% they want to charge me today. Payroll taxes are a deal breaker too.

Are banks expecting those of us who aren't "leveraged" to the hilt to borrow money at the same rates the bankrupt fools of this nation borrowed at to bail them out of their poor decisions? There are no profits in attempting to fleece the frugal. Only stagnation. The days of making millions off of suckers have passed. There remain only honest business deals with wiser women and men.

Your move, Wall Street.