State Economist praises the Federal Stimulus Money

A thorough and informative article was published by Doug Grow from titled “Budget forecast highlights the vastly different federal stimulus views of Pawlenty and state economist.” 

As it states in the article, Gov. Pawlenty has been in “attack mode” regarding almost everything the Obama administration has been doing including the federal stimulus money.  However, quietly praising his approval of what Washington has done is Minnesota’s own State Economist Tom Stinson.  Even Pawlenty’s commissioner of the Office of Budget and Management, Tom Hanson, agrees that the feds’ stimulus money has had a positive impact on putting signs of life back into Minnesota’s economy.

 Stinson noted that economic signs now are far better than those seen last summer and credits the Federal stimulus as a spending tool that has had a big impact on turning the economy around.  He further stated that “without federal action we’d be losing jobs big time.  The recession would have been extended for a year, at least.”

 Also in the article Gov. Pawlenty is quoted as saying “My critique of stimulus spending is that it should have been focused differently.”  A favorite plan promoted by Pawlenty is reducing taxes for corporations and small businesses in order to hire more workers.  A video interview with business icon Warren Buffett contradicts this suggestion, when he says more money to people like him will not increase the spending he already does.  More money to the middle class will promote spending, thus promoting demand, thus promoting jobs.  A similar message is penned in today’s column by Paul Krugman in the New York Times.  “.. the Congressional Budget Office says that aid to the unemployed is one of the most effective forms of economic stimulus, as measured by jobs created per dollar of outlay.”

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