Last week, the Minnesota Budget Project held a briefing with State Economist Tom Stinson. His comments earned a lot of press coverage, especially when he said that the February Forecast will show a larger deficit than the $373 million measured in November. The only question is how much larger. He was unwilling to make a guess, but we’ll all know when the February Forecast comes out, mostly likely on February 28.
Dr. Stinson was asked a question about what governments can do to stimulate the economy. In the last few weeks there has been a lively debate about what action the federal government can take to keep the economy from sliding into recession or to lessen the pain from an economic downturn. Dr. Stinson noted that many have described effective stimulus measures as timely, targeted and temporary. (The Center on Budget and Policy Priorities has a nice issue brief about these principles.) He said that policies along these lines include extended unemployment insurance benefits.
These comments were pretty consistent with what the Minnesota Budget Project has arguing for in the federal stimulus debate, which was described more fully in an action alert and press statement that was handed out at the briefing. The U.S. Senate will be taking a vote this week on their stimulus package.