The Democrats: Punch the accelerator. The intent is to make the recession shorter and less severe. But the risk is that our economy may have a hard time absorbing the costs of the massive intervention, and long term growth is lessened if the Democrats cannot find the brakes after the crisis has passed.

The Republicans: Slam on the breaks. Their intent is to let the recession run its full course, so that the economy that emerges afterwards is best positioned for long-term growth. Their budget plan projects, for example, jobs increases beginning in five years. The risk is measured in terms of how much additional economic damage is done if Republicans cannot find the accelerator after the crisis has passed.

I think it is important to understand that both approaches are supported by lots and lots of highly intelligent, thoughtful, competent people. Conservatives shriek about the Democrats’ plans because they are ideologically anathema to conservative doctrine, but not necessarily because they are bad policy. Liberals shriek about the Republican alternatives because they are anathema to liberal doctrine, but not necessarily because they are bad policy.

At the end of the day, we, the voters, get to decide whether to put our chips on “red” or “blue,” to use a modified roulette analogy. Neither is a sure bet; either carries huge risks.

Advertisements