Second-Guessed: CNBC's Harwood Suggests Tax Cuts May Have Been More Stimulative
Question for CNBC Chief Washington Correspondent John Harwood: Where were you six-and-a-half months ago?
Harwood on CNBC’s July 6 “Squawk Box” noted that the stimulus was not working quite as well as the Obama Administration had hoped – this coming in the wake of comments from Vice President Joe Biden that the economy was “misread” by the administration. The difficulty with the stimulus, he contended, was the inability of the government to spend such a large sum of money in an effective time period.
“Well, I think they’re hoping that this summer period is when they can in fact ramp up the spending,” Harwood said. “It’s not easy to spend the amount of money that they appropriated, $800 billion, that quickly.”
The solution to get it “out the door” might have been tax cuts – to stimulate the economy in a timelier manner.
“Can they be faulted for not getting more money out the door earlier?” Harwood said. “Certainly if you think tax cuts were the best option, you could have gotten more of that money out quicker.”
Harwood stated now is go time for the Obama administration, as summer months are upon us, the prime time for construction.
“They have an argument that direct government spending is more stimulative,” Harwood said. “The summer months, when you got prime, sort of construction season is when they’re hoping to get more of it out. So now is their time to prove themselves.”
During the consideration and adoption of the stimulus bill, economists had questioned if the money appropriated would find its way into the economy in time to thwart the worst stages of a recession. But the media often ignored those questions.
Hopefully, when fall comes, Harwood and others will be ready to report on whether the Obama’s economic ideas and people “proved themselves.”