Gov. Jon Corzine (D-NJ) has been at the forefront of the push for an economic stimulus package that includes aid to state and local governments. “This is a very dangerous time,” Corzine has said. “We need action now.” Along with Gov. David Paterson (D-NY), Corzine testified before the House Ways and Means Committee that states will have to make “devastating cutbacks” if they do not receive assistance from the federal government.
Today, Corzine sat down for an interview with ThinkProgress, and said with regards to the stimulus package, “the only thing that I have been arguing is, whatever big is, make it bigger.” He also explained what he believes needs to be included in the package:
So, a five-part program: infrastructure, social safety net, tax cuts, mortgage finance, and something in health care. If we cover those areas with a very substantial program, I think we can end up arresting the slide of the economy, laying a foundation for the economy to recover, and then get back to more normalized business growth activity and economic growth activity.
Corzine is quite right to focus on these areas as the ones most useful for stimulating the economy. An analysis by Moody’s Economy.com shows that the most “fiscal economic bang for the buck” comes from aid to state and local governments, as well as from increased spending in the form of extended unemployment benefits, a temporary increase in food stamps, and increased infrastructure investment.
Corzine is also right to focus on mortgage relief as an integral part of any response to the financial crisis. Last week, he noted that “we saw 7,500 foreclosures in October [in New Jersey]. We’re going to be at 50,000 this year versus 30,000 in previous years. If you don’t stop that, you’re going to have a hard time ever fixing the banking system.”
Indeed, stemming the tide of foreclosures — which Treasury Secretary Henry Paulson is stubbornly refusing to do — is the best way to reverse what Corzine called “this pattern of accumulating deterioration that is in place.”