Beyond trickle-down

Today's column by Marie Cocco on the economic stimulus package is a must-read:

...a glimpse of what might help [the economy] the most was provided by the CBO analysis of the economic boost it estimates will come from the various provisions of the $825 billion stimulus legislation written in the House. Those that produce the most bang for the buck -- about $2.50 in added economic growth for every dollar spent -- are the precise opposite of what we've been doing until now. They are the very sorts of initiatives congressional Republicans still largely oppose.

The direct purchase of goods and services by the federal government produces as much as $2.50 in growth over several quarters, the CBO says. A dollar transferred to state and local governments for infrastructure spending also is estimated to produce $2.50 in growth. Getting money directly to people through programs such as expanded unemployment benefits and food assistance is estimated to produce $2.20 in growth. And general aid to states to alleviate the problems in balancing their budgets in the face of rapidly deteriorating revenues and rapidly increasing demand for basic public services would produce $1.90.

What element is the least effective? Giving businesses a way to cut their taxes by charging losses that are incurred now against profits made in prior years only produces about 40 cents worth of growth for every dollar spent, the CBO says. It also happens to be the part of the legislation House Republicans are most happy with.