EconomistMom.com

Two nice points made in the Opinions section of today’s Washington Post–an editorial on the talk of a “second stimulus”, and a column by Robert Samuelson on the candidates’ ever-changing energy proposals.

The editorial worries about a “second stimulus” being too politically appealing for the economic costs of such a bill to get in the way:

We understand the political logic of a second stimulus; the economic case is less convincing. Any fiscal stimulus must be targeted, timely and temporary. That is, it must put money in the hands of people who are likely to spend it quickly — while not committing the federal government to new long-term spending. Some Democratic proposals, such as an increase in food stamps or extended unemployment insurance, would meet these criteria, even as they help the neediest ride out the tough times. Infrastructure spending, by contrast, is dubious as stimulus. It takes too long and passes through too many hands. As you might expect, Mr. Byrd’s “stimulus” bill is chock-full of election-year goodies…

…The government can pump only so much borrowed money into the economy before the long-term costs — inflation, higher interest rates — start to outweigh the short-term benefits. And with next year’s federal deficit projected to reach nearly $500 billion, those potential costs loom large, indeed. Federal Reserve Chairman Ben S. Bernanke, who supported the fiscal stimulus this year, seems cool to an extra dose now. As Mr. Bernanke notes, we still don’t know the results of the first stimulus.

(And as I’ve recently remarked, it’s not only too soon to label the first round a “flop” regarding its effect on consumption, it’s not at all clear that if the first round encouraged more saving than hoped, that that’s a bad thing…)

And Robert Samuelson worries that the recent Obama proposal to open up the strategic petroleum reserve, and the ol’ McCain proposal for the gas tax holiday, are bad signs–indicating that the campaign rhetoric can get in the way of seeing the real overlap in some real (good) energy policy ideas the two candidates have.  He frets over:

…the messy process by which democracies reach consensus. “Crises are the only times when we are capable of making difficult decisions,” says former Democratic representative Phil Sharp, who heads the think tank Resources for the Future. High pump prices, he says, “are drawing both parties toward the center”: Republicans will be more open to regulation, Democrats to offshore drilling. The next president will find it easier to act. Maybe. But the preamble has involved so many exaggerations and simplicities that it’s uncertain whether the ultimate response would make us better off — or worse off.

I want to be optimistic and say we don’t need to get too worked up over these antics.  It’s just the campaign talking.  I’m hopeful that policymakers won’t confuse the need for short-term, demand-side (and perhaps deficit-financed) stimulus, with the (legitimate) need for more adequate, longer-term investments in our infrastructure–which ought to go along with the corresponding longer-term increases in national saving needed to finance those investments.  And I’m hopeful that Senators McCain and Obama actually do have a lot of overlap in their ideas for energy policy, and that we’ll see more of those good (but not easy) ideas once one of them is in the White House.