Is It Still ‘Stimulus’ If It Takes Five Months?

With all eyes suddenly on the economy, thanks in large part I am convinced to the extra hyperbole produced by a presidential campaign, there is much talk now of what sort of government “stimulus” package may be offered. Without debating the value of Fed vs. legislative interventions, and without debating the potential long-term ills caused by such short-term interventions, let me just point to a pair of articles in today’s Wall Street Journal that, in a small way, show why such a stimulus is bound to disappoint a lot of people:

David Wessel, in his “Capital” column headlined “Speed and Restraint Are Crucial” (gated, but well worth a read), writes:

“To be effective and prudent — and it’s an open question how effective it will be — stimulus needs to be timely, targeted and temporary.”

A few pages later, in an article headlined “Taxman Could Slow Stimulus Plan,” Sarah Lueck shows why the “timely” part of the stimulus equation can be hard to achieve:

“Even if Congress meets its goal of finishing a stimulus bill before March, it is likely to take until June for the government to start sending out the millions of rebate checks that would be the plan’s centerpiece. It would take a couple more months before all the checks could be mailed.

The IRS — and its computer system — is focused on processing tax returns for 2007, and will be busy until May.

‘It is remarkable that the world’s leading economic power can’t get checks out the door faster than that,’ Peter Orszag, the director of the Congressional Budget Office, told senators at a hearing Tuesday.”