Google has launched new application associated with its e-mail service called “Mail Goggles.” If you have a Gmail account, you can use the Mail Goggles application set it up e-mail so that between certain hours you can only send an e-mail if you are able to solve four math problems within a specified period of time. The idea is prevent the user from mailing stupid or embarrassing e-mails when they are very tired, very intoxicated, or both. The difficulty of the math problems can be adjusted because frankly there are some people who find math hard even when they are stone sober. The basic idea of keeping people from acting hastily before they have the time and disposition to consider their actions. perhaps ought to be applied to Congress. We need slow them up just enough to think before they act.
In October 2008, the government acted quickly and in good faith to prop up the banking system with a $700 billion dollar intervention as part of the Emergency Economic Stabilization Act. There is certainly no consensus now, months later that the intervention was salutary and certainly a consensus that it could have been more thoughtfully considered, better written, and better implemented. That legislation was the product of passion rather than thought, fear rather than reason. It was an interesting alliance between Democrats in Congress and a Republican president.
We are now is a similar situation with regard to the present “stimulus” bill. At present, the House has passed a $800 billion plus bill supposedly directed to stimulus without securing a a single Republican vote and loosing several Democratic ones along the way. The bill is now under consideration by the Senate.
There are certainly some stimulus elements to the bill, but the majority of the spending will occur in future years. Immediate stimulus is very limited and inconsistent with the rhetoric of bill supporters. Moreover, there are elements of the bill that are clearly payoffs to Democratic constituencies with little or no association with economic stimulus, yet included in this rush bill to avoid the scrutiny of fuller deliberation.
It is funny (or embarrassing) to hear Speaker of the House Nancy Pelosi argue that family planning is an economic stimulus. While one could argue that any government spending would add stimulus, a thoughtful person realizes that certain types of spending have a greater stimulus effect that others. It would seem self-evident that the government should prioritize spending in terms of stimulus for a “stimulus” bill.
Some elements of the bill may have their merits. Increased funding for climate research or additional infrastructure spending are important. They should be considered in due course upon their relative values, but they do not legitimately qualify as stimulus.
If the bill is being rushed because we need immediate action, it seems that we should consider primarily those actions that have immediate effects. Building a bridge in 2010 may provide valuable infrastructure or increased spending on schools may contribute long-term economic growth, but they are not immediate stimulus and need not be implemented in a rush without careful consideration.
The Great Depression of the 1930’s is the model of the worst economic period in US history and people often refer to it to determine what to do in our present crisis. Many follow the thinking of John Maynard Keynes and suggest aggressive fiscal policy could alleviate the problem. The enormous spending associated with World War II brought us out of the Great Depression. Nobel Prize winning economist Milton Friedman in the Monetary History of the United States argued that Depression could have been largely adverted if the Federal Reserve had not instituted tight monetary policy.
In our current situation, we have certainly exercised the option of loose monetary policy with interest rates at historic lows. Since, there is always a lag time between rate reductions and increased economic output, perhaps we all we need to do is wait.
However, prudence suggests that we apply some fiscal stimulus as well. Liberals need to remember that fiscal stimulus includes reduced taxes as well as increased government spending. If Congress instituted a tax (income and/or payroll) holiday for a short time we could give an immediate stimulus to the economy. The effects could be evaluated and the tax reductions extended or ended depending on the results. There would less chance of over stimulation inducing a bout of inflation. Such an approach would not mean that additional spending on important programs could not be implemented. However, we should do so in a measured, thoughtful, and deliberate way.
Perhaps if we made legislators solve math problems before voting we could slow them up enough to think through there actions. They certainly aren’t providing due diligence now.
This entry was posted on Sunday, February 1st, 2009 at 8:23 am and is filed under Economics, Politics, Social Commentary. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Make Them Do Math Problems
Google has launched new application associated with its e-mail service called “Mail Goggles.” If you have a Gmail account, you can use the Mail Goggles application set it up e-mail so that between certain hours you can only send an e-mail if you are able to solve four math problems within a specified period of time. The idea is prevent the user from mailing stupid or embarrassing e-mails when they are very tired, very intoxicated, or both. The difficulty of the math problems can be adjusted because frankly there are some people who find math hard even when they are stone sober. The basic idea of keeping people from acting hastily before they have the time and disposition to consider their actions. perhaps ought to be applied to Congress. We need slow them up just enough to think before they act.
In October 2008, the government acted quickly and in good faith to prop up the banking system with a $700 billion dollar intervention as part of the Emergency Economic Stabilization Act. There is certainly no consensus now, months later that the intervention was salutary and certainly a consensus that it could have been more thoughtfully considered, better written, and better implemented. That legislation was the product of passion rather than thought, fear rather than reason. It was an interesting alliance between Democrats in Congress and a Republican president.
We are now is a similar situation with regard to the present “stimulus” bill. At present, the House has passed a $800 billion plus bill supposedly directed to stimulus without securing a a single Republican vote and loosing several Democratic ones along the way. The bill is now under consideration by the Senate.
There are certainly some stimulus elements to the bill, but the majority of the spending will occur in future years. Immediate stimulus is very limited and inconsistent with the rhetoric of bill supporters. Moreover, there are elements of the bill that are clearly payoffs to Democratic constituencies with little or no association with economic stimulus, yet included in this rush bill to avoid the scrutiny of fuller deliberation.
It is funny (or embarrassing) to hear Speaker of the House Nancy Pelosi argue that family planning is an economic stimulus. While one could argue that any government spending would add stimulus, a thoughtful person realizes that certain types of spending have a greater stimulus effect that others. It would seem self-evident that the government should prioritize spending in terms of stimulus for a “stimulus” bill.
Some elements of the bill may have their merits. Increased funding for climate research or additional infrastructure spending are important. They should be considered in due course upon their relative values, but they do not legitimately qualify as stimulus.
If the bill is being rushed because we need immediate action, it seems that we should consider primarily those actions that have immediate effects. Building a bridge in 2010 may provide valuable infrastructure or increased spending on schools may contribute long-term economic growth, but they are not immediate stimulus and need not be implemented in a rush without careful consideration.
The Great Depression of the 1930’s is the model of the worst economic period in US history and people often refer to it to determine what to do in our present crisis. Many follow the thinking of John Maynard Keynes and suggest aggressive fiscal policy could alleviate the problem. The enormous spending associated with World War II brought us out of the Great Depression. Nobel Prize winning economist Milton Friedman in the Monetary History of the United States argued that Depression could have been largely adverted if the Federal Reserve had not instituted tight monetary policy.
In our current situation, we have certainly exercised the option of loose monetary policy with interest rates at historic lows. Since, there is always a lag time between rate reductions and increased economic output, perhaps we all we need to do is wait.
However, prudence suggests that we apply some fiscal stimulus as well. Liberals need to remember that fiscal stimulus includes reduced taxes as well as increased government spending. If Congress instituted a tax (income and/or payroll) holiday for a short time we could give an immediate stimulus to the economy. The effects could be evaluated and the tax reductions extended or ended depending on the results. There would less chance of over stimulation inducing a bout of inflation. Such an approach would not mean that additional spending on important programs could not be implemented. However, we should do so in a measured, thoughtful, and deliberate way.
Perhaps if we made legislators solve math problems before voting we could slow them up enough to think through there actions. They certainly aren’t providing due diligence now.
This entry was posted on Sunday, February 1st, 2009 at 8:23 am and is filed under Economics, Politics, Social Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.