This Isn't Your Grandfather's Recession

Tax cuts won't solve our current economic woes.

By Daniel GrossPosted Thursday, Feb. 12, 2009, at 6:16 PM ET

The congressional debate over the stimulus package may be over, but the larger debate isn't. Many critics of the bill, which contains a mix of tax cuts and government spending, believe that the government spending part just won't work. Thirty-six of the 41 members of the Republican Senate minority voted for an amendment by Sen. Jim DeMint of South Carolina that called for a stimulus package consisting only of tax cuts. Economists whose sympathies lie with the Republicans have backed up the cut-taxes/don't-spend approach. Robert Barro of Harvard, speaking to the Atlantic, called the stimulus package "probably the worst bill that has been put forward since the 1930s." The government spending proposed wouldn't work as intended, he argued. Instead, we should cut tax rates. Harvard economist Greg Mankiw, a former Bush adviser, expressed his preference for a stimulus that would immediately and permanently end payroll taxes, to be offset by an increase in gas taxes.