Sir, Joseph Stiglitz is certainly right in asserting that tax cuts will not help much to stimulate the US economy. [...] However, one has to wonder whether Prof Stiglitz is right in proposing that increased investment in infrastructure, education and technology be given pride of place in President Barack Obama’s fiscal stimulus package.
By their very nature, even if “shovel ready”, infrastructure expenditures are spread over many quarters. As such, whatever their longer-run benefits to the economy might be, they should not be expected to provide the economy with the more immediate boost that it now desperately needs and that might be expected from increased public spending on unemployment benefits, food stamps and support to the states.
Unemployment benefits and food stamps? Aid to states? This is what hell freezing over looks like, which would be a cost-effective solution to global warming if anyone at AEI believed in that either.