Big Stimulus

Ben Furnas runs the numbers on China’s huge stimulus package and concludes that an equivalent stimulus in a US-sized economy would need to be $2.4 trillion. That’s probably more than would be advisable for us, since we are actually in an objectively different situation facing less downside risk from slower growth and also a different fiscal situation that probably doesn’t allow us to spend nearly that much. Still, there’s a big gap between $2.4 trillion and House Speaker Nancy Pelosi’s proposal for a $160 billion stimulus package. Democrats need to think bigger.