Obama's Latest Stimulus Plan Gets Panned By Krugman

[onehandle]

In a speech in Cleveland tomorrow, President Obama will propose an economic stimulus plan that would allow businesses to deduct immediately the entire cost of new equipment from taxes, instead of having to deduct it over the course of up to 20 years, as is the case now. The tax credit is the latest plan to revive the sputtering economy and to prove to critics that the president supports business -- but some are skeptical about whether it can work.

The New York Times's Paul Krugman isn't so sure it's a good idea to put more money in companies' hands, arguing that an increase in public works spending might actually do more to help the economy. Obama's plan includes $50 billion to spend on infrastructure, a figure that Krugman thinks is paltry.

If the president's proposal is in part a political stratagem, Krugman says he should make it bolder. Indeed, with midterm elections approaching, Congress would effectively have only three weeks to pass the legislation before lawmakers begin campaigning, and before the balance of power could shift significantly: The plan might be doomed from the start.

http://www.huffingtonpost.com/2010/09/07/obamas-latest-stimulus-pl_n_707421.html