It seems like the recession is the topic du jour every day and provides journalists, politicians, economists and everyone else for that matter with hours of speculative conversation. While I don't understand everything discussed, I feel like there seem to be two main thoughts on how best to handle the crisis. The first is a more laissez-faire approach that suggests letting the market self-correct with minimal involvement by cutting both taxes and spending. The second is reminiscent of FDR's approach advocating government spending for large-scale projects to get money into the economy and create jobs.
Although people are fairly impassioned about what needs to be done, I'm pretty certain that both schools of thought could ultimately work. The real question in my mind is how long would it take and what would the U.S. economy look like after? How many jobs would be lost forever? How many more Americans will be living below, at or near the poverty level? The questions go on and on, but despite the postulating in the media nobody really knows the answers to these questions. Views are shaded by philosophical biases that either advocate for the more laissez-faire or FDR approach.
However, since state and local governments from coast to coast seem to be increasing taxes and fees for both businesses and citizens and since it is unlikely we will curb spending with one war (hopefully) wrapping up in Iraq and another ramping up in Afghanistan - I simply don't understand how the first approach realistically can even be tried. That leaves me feeling like the only other option is the proverbial - Plan B - or the second option of government stimulus.
So even though I don't know what to expect from Obama's $787B stimulus package, I feel like it is realistically the only option available. The decision to commit to this path is not something one makes easily, and I will continue to respectfully listen to those with dissenting opinions on the matter. However, I will need more than dogmatic, philosophical opinions about cutting spending and taxes as reasoning.
For the laissez-faire approach to be tried, the Federal government needs to remove the US from the world-stage and our many costly obligations as well as ensure that states and cities work in conjunction to cut spending and taxes. Otherwise, this approach seems doomed to fail, because we will not be adhering to the principals of less spending and lower taxes. I don't think the US will ever willingly remove itself from the world stage and I don't know how the Federal government can make states and cities stop raising revenues through taxes and fees so the point might be moot.