The most fiscally responsible way for Congress to support the economy now is with higher deficit spending until it is no longer needed. Why? Because private demand could be weak for the next 18 months or more. In such a case, it’s crucial to prevent premature attempts to make deficits smaller.
As the economy recovers and consumers and businesses get back in the game, Congress can safely withdraw support, handing the reins back to the private sector.
The degree to which Congress’ relief efforts actually reach working families depends upon how effectively lawmakers of good will can fend off the various industry interest groups who will attempt to eat up as much of the allotments as they can.
Congress shouldn’t just settle for short-term band-aids to patch holes in our health care infrastructure and our social safety nets. It can and should use this opportunity to make ambitious, lasting improvements.