Today, Sen. John McCain (R-AZ) held a roundtable with some of his economic advisers, including former Governor Mitt Romney, former eBay CEO Meg Whitman, Gov. Tim Pawlenty (R-MN), and former Housing Secretary Jack Kemp.
In a statement following the roundtable, McCain ripped the idea of an economic stimulus package, calling it a “$300 billion spending spree,” and said “I would rather give the great American middle class additional tax cuts and let you keep that money and invest it in your future.” Watch it:
McCain has been consistently cold to the idea of an economic stimulus package, saying various other proposals are better for energizing the economy. Last week, the campaign released a statement saying “we do not believe that a national crisis should be taken as a license for wasteful spending or earmarked projects,” and advocating McCain’s American Homeownership Resurgence Plan as “the best kind of stimulus.”
McCain economic adviser Douglas Holtz-Eakin said on CBS’s Face the Nation yesterday that “keeping American households spending” is “the greatest stimulus of all“:
[T]he idea that somehow tough economic times are license to spend money on anything you can think of is something you want to look at very carefully. […] There is no greater stimulus than keeping American households spending. They’re 70 percent of the economy. And so focusing on them, keeping them in jobs, creating new jobs, that’s the greatest stimulus of all.
However, there is a growing consensus towards an economic stimulus package aimed at infrastructure investment. The proposal has been endorsed by myriad economists and budget analysts, including Nobel Prize winner Paul Krugman and Fed Chairman Ben Bernanke. In fact, Robert Bixby of the Concord Coalition – which McCain said he would rely on for economic policy advice – recently said that “it’s appropriate…to loosen fiscal policy, so long as it is done on a targeted and temporary basis.”
Furthermore, it is odd that McCain is touting tax cuts for “the great American middle class” as an adequate stimulus package, since his economic plan gives no benefit to over 100 million middle class households. And his job creation plan doesn’t even keep pace with new workers entering the workforce, so it’s difficult to see how it would provide any economic stimulus.
As Krugman noted, “there’s a lot the federal government can do for the economy.” Relying on tax cuts and an ineffective job creation plan is not enough.