The simplest, most effective answer to a downturn would be fiscal stimulus — preferably government spending on much-needed infrastructure, but maybe also temporary tax cuts for lower- and middle-income households, who would spend the money. Infrastructure spending makes especially good sense given the federal government’s incredibly low borrowing costs: The interest rate on inflation-protected bonds is barely above zero.
But unless the coming election delivers Democratic control of the House, which is unlikely, Republicans would almost surely block anything along those lines. Partly, this would reflect ideology: although right-wing economic predictions have been utterly wrong, there’s little indication that anyone in that camp has learned from the experience. It would also reflect an unwillingness to do anything that might help a Democrat in the White House. Remember, every Republican in the House voted against a stimulus even during the darkest days of the slump, when Mr. Obama was at the peak of his popularity.
from Stowe Boyd http://www.stoweboyd.com/post/145500892992
