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More Stimulus

By Matthew Yglesias on October 13, 2008 at 5:18 pm

"More Stimulus"

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To say something else about the stimulus issue, any time the subject of stimulus arises there’s some support for doing an extension of unemployment benefits as part of the package. That’s an idea that I’ve liked less-and-less the more of learned about it. There’s some real evidence that the bad incentive structure extensions creates does a non-trivial amount to undercut the stimulus effect. It’s still a better idea that, say, “tax cuts for rich people!” but it’s worse than a lot of other ideas. Basically, we should be spending money to put people to work doing something useful — infrastructure! — not giving them money that’s conditions on their continued idleness.

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