Stimulus Disaster Looming

Today's Biege Book report shows the economy getting weaker in the opening weeks of 2009 just as it is becoming clearer that Congressional Democrats are set to work over Dear Leader on the tax cut component of his stimulus package (it is not really a tax cut, rather a bunch of small tax goodies, but let's keep it simple) in addition to the usual porcine augmentation. So as the economy deteriorates it becomes more necessary to have stimulus that has more of an immediate impact, but the political winds are going in the opposite direction. The Barney Frank Democrats are demanding more spending and less tax stimulus despite the fact that it is widely agreed among economists of all political stripes that taxes, notwithstanding other debates, work quicker. That much is, after all, patently obvious. That the compatibility gap between real world problem and policy solution is growing wider would be amusing if it weren't such a serious affair.