by the Sandwichman
The ghost of Montagu Norman notwithstanding, the fact that there are bad -- or even stupid -- arguments against something is not, in itself, a good argument for it. Some sort of stimulus package is, at this point, a foregone conclusion. Whether or not StimPack™ '09 is "big enough" or whether or not it will work as intended are questions the Sandwichman will leave for more learned Thebans to debate. What Sandwichman wonders is "what's growth got to do with it... do with it?"
Once upon a time, Keynesian policy was about "full employment", defined as a balance between the number of job seekers and the number of positions available. Then economic growth came to be seen as a prerequisite for attaining full employment. Then full employment was defined downward to the so-called natural rate or the non-accelerating inflation rate of unemployment (NAIRU). Now, even that natural rate seems too high a target for fiscal policy to aim at all at once. Full employment has become an empty promise.
Meanwhile, starting back as early as the 1950s, with John Kenneth Galbraith's The Affluent Society, questions began to emerge about the social and/or environmental efficacy of economic growth as a prime policy objective. Doubts compounded in the 1970s, with the Club of Rome's Limits to Growth and Fred Hirsch's Social Limits to Growth.
Now suddenly, after 30 years of neo-liberal orthodoxy -- a regression Hirsch presumed was unthinkable -- we're being beamed back to the pre-Reagan era for a refreshing blast of old-time Keynesian pump-priming. Happy days are here again! What am I missing? All those insights into the inherent contradictions of Keynesian demand management. The stuff about conservation of resources and the distinctions between the material economy and the positional economy.
What if the StimPack™ '09 answers we have are for problems people don't have? "They've got other problems and we don't have any answers."