The best way to make sure that a vast stimulus package doesn't turn into a federal boondoggle bonanza is for that money to go directly to private citizens and local governments. Reducing payroll taxes for middle- and lower-income people harkens back to the Jacksonian idea of small-government egalitarianism. Shoring up the balance sheets of state and local governments would help ensure that those governments don't make the downturn worse by cutting spending during a recession.
Wednesday, January 7, 2009
Ed Glaeser wrote a nice piece on the risks and opportunities with a fiscal stimulus package. Here's one of his suggentions: