It looks like tomorrow President Obama will sign into law the stimulus bill. It is a historic bill -- a meaningful re-distribution of wealth that contrasts sharply with the previous administration's approach to distributing wealth, especially their initial tax cuts. About this plan, the other day I wrote:
The argument against Obama's plan is that it exacerbates monetary risk.
The words 'monetary risk' represent a need for new categories of language and knowledge. The recent era of easy money was little concerned with monetary risk. Instead, the country has proceeded as if our monetary regime is beyond reproach -- we were, we are, the world's printing press, the thinking went, and so we can, if we choose to, create more and more debt. Or, as Dick Cheney, put it, "Reagan proved deficits don't matter."
The current contraction is ending this knowledge. Events are showing that America's ability to print money and finance huge debts is not endless.
It is time the words 'monetary risk' get bandied about more seriously when economists, social scientists, journalists, and businessmen and women talk. The sentiment behind the words should be in the minds of elites and publics alike.
But to this point, our ideas have not yet acclimated to this new knowledge, as this stimulus bill includes tax cuts instead of a way to pay for it.
That said, I still am for the stimulus.