economists from across the political spectrum are raising the ante on how much the government should lay out. Some are now calling for at least a $1 trillion boost. Kenneth Rogoff, a Harvard University professor who was an adviser to Republican presidential candidate John McCain, and Joseph Stiglitz, a Nobel Prize winner who served in President Bill Clinton’s White House, are among those who say President- elect Barack Obama should push for a package of that size. “They need a stimulus of $500-to-$600 billion a year for at least two years to counter what is going to be a collapse in consumption,” said Rogoff, a former chief economist at the International Monetary Fund.
Mark Sanford on the other hand wants fiscal restraint:
South Carolina's Gov. Sanford is resisting the urge to propose or accept raising taxes. Faced with a shortfall, Gov. Sanford reconvened the state Legislature in October, and it made $488 million in targeted budget cuts. Gov. Sanford, unlike most of his colleagues, speaks out against any federal bailouts, including a fiscal stimulus bill that is likely to include state aid. "When times go south you cut spending," Gov. Sanford said. "That's what families do, that's what businesses do, and I don't think the government should be exempt from that process."
Publius calls this Sanford-nomics:
This is of course dead wrong -- and confuses microeconomics with macro, as any student of Econ 101 could tell you. The micro-considerations of an individual family or business has nothing much to do with what governments need to do to get the larger economy moving again. (Or just go read someone who actually knows what he's talking about - Krugman). Even worse, it's often affirmatively harmful to adopt microeconomic solutions to macroeconomic problems. Hoover: Ain't that the truth ... One larger point here is that, while "rising stars" like Sanford and Jindal may be individually compelling, they must operate within a Republican Party that has enthusiastically embraced ignorance on a whole host of subjects, economics included. The issue is whether they can escape these constraints.
Despite the fact that Kenneth Rogoff tried to advise John McCain during the campaign – McCain also called for reductions in government spending. Go figure.