It just never stops. James Pethokoukis, who spent the fall telling us that the market was falling due to the impending Obama election (AKA the Goldberg Theorem), writes about the next stimulus package (since the current bill, which has not even been signed yet, is going to fail). Not surprising, he has some ideas as to what should be in it. You won’t be surprised by his prescription for economic recovery:
Bad economy, and elections looming at the end of 2010. Kind of sounds like the sort of environment where, if you were a Washington politico, you might push hard for Son of Stimulus. Any such package might look a lot like a paint-by-numbers sequel to the 2009 version. And the White House itself keeps saying that the $800 billion stimulus is merely a “down payment” for future spending on things like green energy and healthcare.
But another option would be a growthier package that would improve the long-term productivity of the economy and help families in the near term. Here are a few ideas: 1) eliminate capital-gains taxes so that the income tax would be transformed into a de facto consumption tax that encourages investment; 2) dramatically cut or eliminate business taxes so that U.S. companies could better compete globally; 3) index Social Security benefits to inflation and extend the retirement age, allowing a big cut in payroll taxes for the middle class; 4) create government-funded “innovation prizes” for key technology challenges; and 5) give universities financial incentives to create more science geeks and offer grad students free-floating fellowships to choose the field with the best prospects.
Tax cuts and John McCain’s technology prize.