I had to watch President Obama’s jobs speech. I was scheduled to comment after the speech on a BBC radio program. Quite often, I skip his speeches. I already know what he plans to say. Tonight was no exception, but I had to watch.
The BBC producer warned me politely that a left-of-center commentator would join the discussion. It turned out to be Larry Kotlikoff of Boston University.
Anyway, here is my summary:
The President proposed a half-price ($450 billion) second stimulus. He did not put a price tag on it, as I recall, but the press did. The proposed stimulus consists of spending increases for all kinds of goods things like roads and teachers and of short-term tax cuts in payroll taxes and hiring incentives. He did not mention that such short term fixes have been proven to have little or no effect – an inconvenient fact that only academic economists talk about, I guess.
The speech was delivered forcefully and with passion. It might raise his polls. But inquiring minds will want to know why a smaller second stimulus will accomplish what a larger first stimulus did not.