Russ Roberts, the former Washington U. economist who’s now at George Mason University, makes some very good points about why an economic stimulus package won’t work. In an essay for National Public Radio, he starts with some sound logic:

But if politicians know how to stimulate the economy, why wait for a recession? If you can make the economy grow, why wait for bad times?

One answer is that a healthy patient doesn’t need medicine. But the other possibility is that it’s all hot air. Maybe we don’t know how to make a $14 trillion economy move very quickly. And if we did, it would take a lot more than an injection of even 125 billion dollars.

Then he moves on to the economics of the matter:

The standard stimulus package doesn’t change incentives. It’s a check from the government. The hope is that the receiver will spend it. But when you just send out checks from the government, whoever gets stimulated is likely to be offset by someone who gets unstimulated.

The money has to come from somewhere. If you raise taxes to fund the plan, the people who are taxed are poorer and they’ll spend less. If you borrow money to fund the plan, the people who buy the government bonds have less money to spend and that offsets the stimulus. It’s like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing — the water in the shallow end doesn’t get any deeper.

As I noted in a recent column, the current slowdown may be especially resistant to that sort of water-dumping exercise.