Obama Stimulus Plan: Another Vote Against

Supermart investment strategist Ed Yardeni outlines his plan to help the economy:

1) Have the Fed target the 10-year Treasury bond yield at 2 percent and buy mortgage-backed securities.

2) Have the Treasury borrow $1 trillion on behalf of Fannie and Freddie and let them lend it out at 4 percent. (He figures the subsequent boom in refinancing would amount to a $200 billion a year "tax cut" for consumers with mortgages. It would also help deotoxify bank balance sheets.

3) Suspend mark-to-market accounting for three years and reconstitute the uptick rule. (He calls M2M the number one reason a $200 billion subprime problem turned into a multi-trillion dollar problem.)

4) Cut the captial gains tax rate to zero for the next two years.

Yardeni's bottom line:  "I am totally against a $500 billion stimulus program focused on infrastructure spending. ... It will certainly be overwhelmed by corruption and won't create anywhere close to 2.5 million jobs over the next two years. The total number of nonresidential construction workers peaked at 3.39 million in January 2007 when construction was booming."

Me: You know, there's that Pigou Club started by Greg Mankiw for people who are pro-carbon tax. Maybe I should start a Reagan Club for those who want to boost the economy more free-market policies and an FDR Club for those who want a "new New Deal." This plan has elements of both, a tax cut plus more government spending.