Stimulating speculation

Signing the federal stimulus bill, as President Obama did on Tuesday, impressed the market no more than did the bill's passage last week.

Stocks plunged when the bill was passed, and they tumbled again Tuesday. We must all hope that the market doesn't know anything, and that whatever it suspects will happen is wrong.

With its description of how the package would work, the White House didn't help.

For example, it said the package would save or create 44,000 jobs in Oregon, or between 8,000 and 8,500 in each of Oregon's five congressional districts. Such an even distribution of jobs, regardless of the local economy, made the number appear the result of a guess rather than any real information of the kind that might build confidence.

The first money from the package in Oregon apparently will go to schools to prevent layoffs. That certainly helps prevent more joblessness. But what about the added $229 million in "increased federal Medicaid dollars" for Oregon? Will this lead to more employment or less joblessness?

The package cut taxes slightly for most people and handed money to the working poor, up to $2,000 for a four-person household in which one person works at the minimum wage, resulting in 2 million Americans being lifted above the poverty line. Does this strengthen the foundations of the economy?

The act calls for 40 million "smart meters" to measure electricity in American homes. Let's hope this is not the kind of meter that caused an old veteran in the Midwest to freeze to death this winter when the machine cut off his power.

All the things in this package are speculative. The government hopes that if it borrows a lot of money and spends it, Americans and the world will quit acting so panicky and the economy will get back on an even keel. So in the end the details may not matter. But evidently they matter to the market.

Among many, many other things, the package includes unspecified "steps" to expand access to broadband technology. That technology is expensive for consumers. Maybe that's what people are supposed to spend their tax cuts on.

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