I agree with Newt ..it is painfully obvious that the "stimulus" is not stimulating so there is a movement to interject another consisting of tax credits to help small business ( the largest employer in the nation) who is the entity that "creates" jobs. ( The Reps and economists  told them that maonths ago but did they listen ..?  no!)

Newt has suggested rather than allocate (borrow or print) new money for this that they suspend the monies from the original  that are to be spent in later years and use it for this instead.  It is pretty obvious that if they do not do something soon those monies will be a moot point with little or no tax revenue to repay them coming in.  It will all collapse.

I agree with Newt..it amy be the ONLY way to save us.

It could be done by suspending or dramatically reducing matching taxes, SSI contributions and Small corporation taxes to allow small business owners to employe people for less.  It could also be temporary and reinstated later when things improve/.

• A two-year, 50% reduction in Social Security and Medicare tax for both employee and employer match.
• Match the Chinese tax on capital gains: their rate is ZERO.
• Adopt the Irish tax rate on corporations of 12.5%.
• Abolish the death tax.

Paul Krugman

Readers shared their thoughts on this article.

• Read All Comments (177) »

Unfortunately, those worries have proved justified. The bad employment report for June made it clear that the stimulus was, indeed, too small. But it also damaged the credibility of the administration’s economic stewardship. There’s now a real risk that President Obama will find himself caught in a political-economic trap.

I’ll talk about that trap, and how he can escape it, in a moment. First, however, let me step back and ask how concerned citizens should be reacting to the disappointing economic news. Should we be patient and give the Obama plan time to work? Should we call for bigger, bolder actions? Or should we declare the plan a failure and demand that the administration call the whole thing off?

Before you answer, consider what happens in normal times.

When there’s an ordinary, garden-variety recession, the job of fighting that recession is assigned to the Federal Reserve. The Fed responds by cutting interest rates in an incremental fashion. Reducing rates a bit at a time, it keeps cutting until the economy turns around. At times it pauses to assess the effects of its work; if the economy is still weak, the cutting resumes.

During the last recession, the Fed repeatedly cut rates as the slump deepened — 11 times over the course of 2001. Then, amid early signs of recovery, it paused, giving the rate cuts time to work. When it became clear that the economy still wasn’t growing fast enough to create jobs, more rate cuts followed.

Normally, then, we expect policy makers to respond to bad job numbers with a combination of patience and resolve. They should give existing policies time to work, but they should also consider making those policies stronger.

And that’s what the Obama administration should be doing right now with its fiscal stimulus. (It’s important to remember that the stimulus was necessary because the Fed, having cut rates all the way to zero, has run out of ammunition to fight this slump.) That is, policy makers should stay calm in the face of disappointing early results, recognizing that the plan will take time to deliver its full benefit. But they should also be prepared to add to the stimulus now that it’s clear that the first round wasn’t big enough.

Unfortunately, the politics of fiscal policy are very different from the politics of monetary policy. For the past 30 years, we’ve been told that government spending is bad, and conservative opposition to fiscal stimulus (which might make people think better of government) has been bitter and unrelenting even in the face of the worst slump since the Great Depression. Predictably, then, Republicans — and some Democrats — have treated any bad news as evidence of failure, rather than as a reason to make the policy stronger.

Hence the danger that the Obama administration will find itself caught in a political-economic trap, in which the very weakness of the economy undermines the administration’s ability to respond effectively.

As I said, I was afraid this would happen. But that’s water under the bridge. The question is what the president and his economic team should do now.

It’s perfectly O.K. for the administration to defend what it’s done so far. It’s fine to have Vice President Joseph Biden touring the country, highlighting the many good things the stimulus money is doing.

It’s also reasonable for administration economists to call for patience, and point out, correctly, that the stimulus was never expected to have its full impact this summer, or even this year.

But there’s a difference between defending what you’ve done so far and being defensive. It was disturbing when President Obama walked back Mr. Biden’s admission that the administration “misread” the economy, declaring that “there’s nothing we would have done differently.” There was a whiff of the Bush infallibility complex in that remark, a hint that the current administration might share some of its predecessor’s inability to admit mistakes. And that’s an attitude neither Mr. Obama nor the country can afford.

What Mr. Obama needs to do is level with the American people. He needs to admit that he may not have done enough on the first try. He needs to remind the country that he’s trying to steer the country through a severe economic storm, and that some course adjustments — including, quite possibly, another round of stimulus — may be necessary.

What he needs, in short, is to do for economic policy what he’s already done for race relations and foreign policy — talk to Americans like adults.

Oh, groan.  It’s true. That old fool Newt is probably going to run in 2012.  Sigh. 

Who says the stimulus plan isn’t working?  I have seen the RA signs and my paper has published pictures of them in other areas. 

32 billion of the stimulus package is going toward higher education. Students who fall into the lowest income group will receive $5,350 for attending college through Pell Grants. This will help students in paying average costs of three quarters of a four year college degree. 800,000 students will be getting this Pell Grant Funding.

Many people have researched and applied for women’s grants, community grants, small business grants, etc.

Much info online.  Just because there is no infrastucture repair on your block doesn’t mean it isn’t happening elsewhere.