"We asked a group of economists how they would use the money if they had their druthers. "

Economix asks a bunch of Economists about the details of a Stimulus, which is good, because I've been complaining about people simply bellowing out figures in a very Mechanistic sort of way. However, as I've said, I don't consider social safety net spending part of a Stimulus. That said, let's see what these Big Shots recommend:

"The Ideal Stimulus Package

By Catherine Rampell

President-elect Barack Obama and members of Congress are considering a fiscal stimulus package that’s reportedly in the ballpark of $500 billion. How should that money be spent?

We asked a group of economists how they would use the money if they had their druthers. For simplicity’s sake, we gave them the condition that they had to use every penny of the $500 billion on government spending or tax cuts or both. A collection of their responses is below. If you think you have a better plan, leave it in the comments or send it to economix@nytimes.com."

"Joseph Stiglitz, professor at Columbia Business School and Nobel laureate: “Right now there’s going to be a major shortfall in revenues for states on the order of a magnitude of $100 or $150 billion per year. This means they may cut back on expenditures, which would be like a negative multiplier and lead to a contraction in the economy. The first priority is making sure to fill in the hole, that shortfall in state and local money … ( Fine )

“The second thing I would do is that we need stronger unemployment insurance. Unemployment is growing more long-term again, and we don’t know the magnitude of that. I’d put that at the top of the priorities, including help for those who would otherwise lose their home because they’re unemployed, and health insurance for the unemployed. That’s my second priority. ( Fine )

“The third, I think, obviously is spending money to try to prevent foreclosures, whether that’s part of TARP, or a successor to TARP. That would be foreclosures among lower-middle-income people … which would help stem the financial crisis. ( Not sure. The details matter here. )

“Then fourth is the remaining part needs to be divided among several categories. One of the critical issues here is how quickly you can gear up various kinds of spending categories. There are two important criteria: The first is the bang for the buck, how much stimulus we get for every dollar we spend. The second is consistency with our long-run vision. That means supporting R.&D., including green R.&D. as well as basic research. That also means infrastructure, and restructuring the economy for higher energy prices. That also means schools. There are a lot of decrepit schools. That means a broad infrastructure deficit.( Fine )

“I would actually scale back military expenditures which do not stimulate the economy as much as some of these other kinds of expenditures. Given the high deficit, we have to be careful how we spend money, given our various financial problems. We should restructure our health care system, our energy system, and our military system.” ( I'd cut it by at least 25 %. ) "

"Tyler Cowen, professor at George Mason University: “I would modernize the few critical bottleneck airports in the U.S., most of all La Guardia and Kennedy. That would not cost a fortune. ( Fine )

“I would try to ensure that state and local governments do not cut funding which they will later restore. To me that is more important, and more conducive to macroeconomic stability, than embarking on new and potentially dubious programs. That will cost most of the money. It’s not that I think state and local governments are always so efficient and wise, but rather this is a very simple and direct way to prevent the economy from being hit by yet another sectoral shock when it is already reeling. ( Fine )

“There are many good ideas, such as electronic medical records, that will not benefit the economy as macroeconomic stimulus. And so they do not make the list as you have phrased the question. ( Fine )

“If there is money left over I would spend it on cutting the Social Security payroll tax for specified groups of lower- to middle-income workers, thus encouraging the resumption of hiring.” ( Fine, but it's my 2nd choice after cutting sales taxes )

Casey Mulligan, professor at the University of Chicago: “I would spend $300 billion on immediate across-the-board tax cuts. Let’s say add a line to the end of the tax return that says ‘take X percent off your tax liability.’ This is like the special war surcharge we had during WWII except that it is a reduction rather than a surcharge. X would be determined by whatever percentage costs $300 billion. This would be available as soon as a person files his 2008 tax return (would be late January for some people). ( I prefer targeted cuts )

“I would spend $200 billion on important and needed infrastructure upgrades. Homeland security investment. Renovation of the more aged (but still used) roads and airports.” ( Fine )

Andrew Samwick, professor and director of the Nelson A. Rockefeller Center at Dartmouth College: “If I had my druthers, the word ’stimulus’ would be expunged from public discussion, along with ‘bailout’ and ‘rescue.’ These words convey the idea that, because we have so mismanaged our economic and financial affairs, we are somehow able or entitled to conjure up additional funds out of thin air to fix our problems. There are two problems with this idea.

“First, the purpose of government spending is to purchase goods and services that the government needs to meet its responsibilities, not to hand out resources to those who panhandle most loudly for them. The reason to spend more in a recession is not to employ idle resources — it is to be able to stretch the taxpayers’ money further by getting a better price for its purchases because workers without jobs will work for less and owners of empty factories will charge less. Second, there is no free lunch: the money we spend today is a loss to the Treasury, whether as ‘timely, temporary, and targeted’ tax cuts that have no discernible impact; payments to delay bankruptcy for large, mismanaged entities, whether A.I.G. or the Big Three; or the largest public works program since the Interstate highway system. That loss to the Treasury must be made up at some future date, by later cohorts of taxpayers.

“Fortunately, both of these problems can be overcome by focusing all new spending on investment rather than consumption and on public investment rather than private investment. By their nature, capital investments last for years or decades, so that there is a better chance that those who are paying for the spending are reaping its benefits. Public investment also meets the criterion that the spending goes for projects that are within the government’s responsibilities. Repairing roads today removes the need to repair them for a number of years. In 2005, the American Society of Civil Engineers released a report card in which it estimated that $1.6 trillion would be required over a five-year period to restore the nation’s physical infrastructure to good condition. If I had a target of $500 billion to spend, every dime would go for public infrastructure investments, and we’d still have quite a bit of work left to do.” ( I tend to agree about the stimulus spending a large chunk on investment. If you want to stretch the taxpayer's money, just do whatever works. I don't understand the lower wages point and empty factories point. If it's such a great deal, then why aren't private sector businesses immediately taking up the slack? Isn't a stimulus supposed to take the place of private sector spending which is frozen? It sounds like he's making my value investor point about TARP: Since we're in a downturn, we can save a bunch of cash on infrastructure, which we need to do in any case. This would have, just like seeing the buying of toxic assets at low prices as government sponsored value investing, the effect of making government appear to be welcoming a recession, especially if you're also going to use the opportunity to skewer organized labor. Pardon me, but that's a recipe for some kind of a Flambe. Some points about language: If you're going to call people "panhandlers", have the decency to say to whom you are referring. As to the words "stimulus", "bailout", and "rescue", they have this connotation because people assume, including financial types, that the government steps in during a crisis or catastrophe. Good luck expunging that expectation. )

"Dean Baker, co-director of the Center for Economic and Policy Research: “For the stimulus to be well spent, we want it to go to areas where it could be spent quickly and ideally have lasting benefits for the economy. The $500 billion figure is probably too low, given the sharp falloff in the economy, but it is an important start.

“Between $80 billion and $100 billion can be used on traditional infrastructure projects like repairing roads and bridges. A comparable amount ($80 billion to $100 billion) can be used over the next two years for green projects, like retrofitting buildings to make them more energy efficient. ( Fine )

“State and local government could use around $100 billion to offset revenue shortfalls. Some of this money can be tied to measures that promote family-friendly workplaces (e.g. paid time off), like tax credits to small businesses that provide paid sick days. ( Fine )

“The other $200 billion to $240 billion should be used to extend health care coverage. Coverage can initially be extended through a system of generous tax credits for employers who extend coverage to previously uncovered workers. Employers who already provide coverage can be given incentives to make their coverage more generous. ( Fine )

“To get to a longer term plan, President-elect Obama should open up the Medicare system to all workers and employers. This will get him on track to implement his health reform plan.” ( Here I disagree. This should be argued on its own merits. )

"Raj Chetty, professor at the University of California, Berkeley: “Conditional on having a fiscal stimulus of this size, I think that three objectives should be kept in mind: a) targeting money given to individuals to those who will spend it immediately (primarily low-income, low-wealth households) ( FINE ); b) when giving money to stimulate business activity, limiting government involvement and using market forces to the extent possible to distribute the money ( FINE ); and c) implementing a set of programs that, if retained after the stimulus is necessary, are desirable from a long-run perspective (e.g. a move toward fundamental reform in areas like health care) ( NO. SHOULD BE DEBATED ON THEIR OWN MERITS )

“With these three objectives in mind, I’d propose a three-part plan along the following lines (this is a rough description — obviously one would want to work out the details carefully):

“1. $150 billion to expand social insurance programs: this is critical for a demand-side stimulus because individuals eligible for these programs have a high marginal propensity to spend. In particular: ( FINE )

– Increase federal unemployment insurance benefits (a key feature that should be introduced is allowing unemployed individuals to be eligible for benefits even if they move to a different state — they now lose eligibility if they do so. This prevents workers laid off in Michigan from moving to find a job. ( FINE )

– Provide some type of health insurance for the unemployed, helping ease transitions. This could pave the way to a universal health insurance program later. ( FINE )

– Expand food stamps and earned income tax credit and simplify take-up to get more people claiming these benefits (right now only half of food stamp eligible individuals actually get their food stamps). ( FINE )

– Expand loan programs for education (e.g. Pell grants) while making the system more transparent and simplifying the application process, which seems to limit take-up. ( NO. SHOULD BE DEBATED ON ITS OWN MERITS, WHICH IS COMPLICATED )

“2. $200 billion on public infrastructure, e.g. highways, rebuilding schools, improving the energy grid, and the like. This ’supply side’ stimulus will give more people jobs and thereby increasing spending. ( FINE )

“Much of this should be subsidies to private companies — better to change prices rather than directly get the government involved, which could lead to considerable inefficiency via suboptimal allocation of funds. Some of this could take the form of a well-targeted investment tax credit rather than direct ‘public works’ — e.g. offer companies subsidies to rebuild highways or schools. ( THIS I REALLY LIKE )

“3. The remaining $150 billion could be used for a ‘middle class’ tax cut, for incomes between say $30,000 and $100,000. This can be sent out in the form of large rebates rather than reductions in tax rates, in order to increase the probability that they get spent.” ( I PREFER A SALES TAX CUT )

"Mark Zandi, chief economist at Moody’s Economy.com: [Click here for a table containing Mr. Zandi’s complete plan.] ( GOOD FOR YOU )
“The package includes $300 billion in government spending and $200 billion in tax cuts. Government spending provides the largest economic bang for the buck, particularly infrastructure spending ( FINE ), as it immediately adds to output and jobs here in the U.S. Aid to state government will also forestall immediate cuts in programs and jobs that states have to undertake to satisfy their balanced budget requirements FINE ). Infrastructure spending will take time to benefit the economy, and a tax cut is necessary to provide some quick support to the economy. A payroll tax holiday and a permanent payroll tax credit would be effective tax cuts, particularly if designed to help harder-pressed lower- and middle-income households and smaller businesses ( FINE. EVERYBODY PREFERS THIS TO MY SALES TAX CUT ). If I had my druthers, however, the recovery package would be measurably larger than $500 billion. It is important for policy makers to send a strong and clear signal that they will do whatever is necessary to revive the economy. Only a concerted, comprehensive and consistent policy response stands between a severe recession and another depression.” ( I DON'T KNOW WHAT THE FIGURE SHOULD BE UNTIL I SEE WHAT IT'S FOR )

"Nathaniel O. Keohane, director of economic analysis and policy at the Environmental Defense Fund, an environmental advocacy group: “How to spend $500 billion?

“There are lots of ways to spend half a trillion dollars as an economic stimulus, but a few principles can come in handy: pump the money into the economy quickly, which means projects that can be financed within the next 6 to 18 months ( FINE ); spend the money on goods and services produced with American jobs ( OF COURSE ); channel the money to states and localities that can spend it wisely, and hold them accountable ( VERY GOOD ).

“But there is also a fourth — equally important — principle: avoid a high-carbon hangover. While the economic crisis demands urgent and immediate attention, we also face a long-run crisis: global climate change caused by the emission of carbon dioxide from fossil fuels (and other greenhouse gases), which threatens catastrophic consequences for our children and grandchildren. Whatever is spent on stimulus must be aligned with this long-term priority. We need to ensure we don’t spend hundreds of billions of dollars and still end up with a transportation and electric power infrastructure built for the 20th century, instead of the 21st century. Funding proposals should be subject to a ‘carbon screen’ to make sure that they move our economy toward a low-carbon future rather than locking in global warming. For example, rather than rushing to build new roads that encourage suburban sprawl, let’s fix our existing roads (and bridges) first. Rather than building wider highways, let’s build rapid transit corridors and car-pool lanes — or better yet, sidewalks and bike lanes. Rather than building coal-fired power plants, let’s build the transmission infrastructure needed to expand wind and solar generation. ( FINE, BUT I WOULD CONSIDER NUCLEAR AS WELL )

“Even with these principles as a guide, it turns out to be surprisingly hard to spend half a trillion dollars. So I’m going to be modest, and only lay claim to $100 billion over two years. That amount of money could fund a green stimulus package that would create and support good jobs while modernizing our transportation infrastructure, making homes and businesses more energy efficient (leading to lower utility bills for years to come), laying the groundwork for a ’smart’ electricity grid, and restoring key ecosystems.( SINCE YOU'RE KEEPING YOUR WISH LIST DOWN, GO AHEAD. )

“For starters, the Environmental Defense Fund has identified a number of energy efficiency measures that could be funded right away — like $1 billion to help homeowners install energy efficient windows, $750 million to install devices that will cut fuel consumption by long-haul trucks, and $600 million to help households buy smart boiler controls. These products are made in the United States — meaning more jobs for American workers — and would save homeowners and small businesses money in the years to come. ( FINE )

“Other good ideas (from other environmental groups and from think tanks like the Center for American Progress and the Center for Budget and Policy Priorities) include:

•$8 billion to modernize public transit;

•$2 billion to improve intercity rail;

•$5 billion to “green” affordable housing;

•$3 billion to finance a Clean Energy Corps;

•$4 billion to restore ecosystems including the Florida Everglades and coastal Louisiana;

•$10 billion to start building a “smart grid” — the foundation for an electricity infrastructure that rewards conservation and supports renewable energy generation.

“All told, there is $100 billion worth of such projects ready to go; most of the federal spending is already authorized by legislation, and needs only to be appropriated. While we stimulate the economy, let’s lay the foundation for a low-carbon future.” ( I LIKE THEM, BUT THIS LOOKS TOO MUCH LIKE PORK SPENDING. ALSO, I'M NOT SURE HOW MUCH I WANT THE GOVERNMENT INVOLVED IN THESE IDEAS, SO, I'D NEED TO SEE MORE DETAILS. )

"Andrew Roth, director of government affairs at the Club for Growth, an organization that promotes lower taxes and limited government: “The best way to spend $500 billion would be to permanently eliminate the corporate income tax. It’s a smart move, both economically and politically. This country needs to rebuild its capital base. Eliminating the inefficient tax on corporate income would increase profits, which would in turn expand production and increase job opportunities. It would also instantly increase asset valuations like 401(k)’s, I.R.A.’s, and homes, which have been hemorrhaging in value over the last several months. Eliminating the corporate income tax would also reignite competition and spur innovation, allowing people to buy more for less.

“It’s impossible to calculate with any precision the cost of this idea. But most businesses are making relatively less income this year than in years before, so taxpayers could get more bang for the buck with a tax cut. Plus, we could “pay” for part of the tax cut by doing away with subsidies, tax incentives, and other forms of corporate welfare that pervert our tax code and create an uneven playing field where the government chooses winners and losers.

“Politically, both Republicans and Democrats recognize that our country has a punitive corporate income tax rate. We have the second-highest rate behind Japan in the developed economy. President-elect Obama and Democratic leaders in Congress should join Republicans in a bipartisan fashion to cut the corporate income tax rate so that our country can start moving forward again.” ( He's got one idea. I prefer a very serious tax cut for investment, which does have a similar justification to this plan. But he's like a leftist who wants to use the crisis for a permanent ratcheting up of the Welfare State. I'm sympathetic to his ideas, but he would have said this a year ago I bet. )

So, that's it. No one likes a cut in sales taxes. A few would go along with tax cuts to create an incentive for investment. The rest is a hodgepodge of infrastructure ideas that I say should be viewed as investment and spent on projects we would or should do in normal circumstances. Again, social safety net spending for the truly needy I'm all for, only I don't consider that a stimulus.