Well, it's too late to consider this idea (perhaps), but a very bright friend raised an interesting proposal during a recent conversation. He suggested that in order to get people spending money again, the stimulus should come in the form of spending vouchers. Under this proposal, the government would send recipients vouchers (in the form of certificates or debit cards) equal to a specific monetary amount. The vouchers would entitle recipients to purchase goods and services at merchandisers. Recipients could not use the vouchers to pay down debt, and the vouchers would expire in a pre-determined amount of time (which would prevent hoarding).
Precedent for this idea exists in other countries. Taiwan has used this process to revive its slumping economy, and some business advocates have recommended that Australia follow the same approach. This proposal could have satisfied conservatives who argue that "people spend their own money best" and liberals who want to help "Main Street" with cash subsidies.
This proposal could also overcome some of the inherent weaknesses of other consumer spending items, like stimulus checks and tax cuts. Many people will simply save the proceeds of stimulus checks, which frustrates the very purpose of the stimulus package. Also, economists tend to criticize tax cuts as a part of emergency stimulus packages because they do not rapidly impact the economy and because higher income individuals benefit more substantially from them. The Tax Policy Center, for example, has harshly graded most of the tax components of the stimulus package.
What do you think about the idea? I have combed through the draft stimulus, and it contains a lot of spending for "programs," but a lot less direct money for consumers. Also, the tax components will certainly lack an immediate effect. But both parties got to pad the legislation to benefit their most influential -- as opposed to most needy -- constituents. Great....
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