Jared Bernstein, a senior economist at the Economic Policy Institute, says nothing has changed. "A Keynesian is a supply-sider in a recession," he jokes, implying that as soon as economic ill winds begin to blow, fans of trickle-down economics turn into New Deal activists.
In this case, Leonard and Bernstein (there's a joke there somewhere) are discussing the sudden, seemingly universal consensus on "the need for putting extra money into people’s hands quickly"—and how that policy once worked to stave off a recession that could have been worse:
In 2001, some 90 million households received $38 billion in rebates, in the form of checks for $300 for individuals and $600 for married couples. In 2005, a landmark paper by economists David Johnson, Jonathan Parker and Nicholas Souleles, analyzed how and when those rebate checks were spent.
"We found there was a fair bang for the buck," says Parker. "It provided a substantively important effect. And those who spent it more quickly were those who had low incomes and low liquid assets."
The trick this time, Leonard notes, will be to keep all the major components of a stimulus package directed at those who need it (and, more important, will spend it) rather than at richest taxpayers and the corporations who are first in line when the handouts start flowing—all the while insisting on the primacy of free-market principles.
