Stimulus

Investment in Stimulus Package Aimed at Economic StabilizationThe Coronavirus Aid, Relief, and Economic Security (CARES) Act

Some economists argue that the government should increase spending during a depression in order to boost the economy. They

The long-term value of federal infrastructure projects is dubious. Federal policymakers lack the incentives and information required to make good investment decisions, leading to numerous problems.

In 2004 Logan, Utah, saw the opportunity to place a turbine within the city’s culinary water system. The turbine would reduce excess water pressure and would generate clean, low-cost electricity for the city’s residents. Federal funding was available, and the city qualified for a grant under the American Recovery and Reinvestment Act. Unfortunately, Logan City found that a complex and costly federal nexus of regulatory requirements must be met before any hydropower project can be licensed with the Federal Energy Regulatory Commission. This regulation drove up costs in terms of time and money and, as a result, Logan City is not planning to undertake any similar projects in the future. Other cities have had similar experiences to Logan’s, and we briefly explore these as well. We find that regulation is likely deterring the development of small hydropower potential across the United States, and that reform is warranted.

Policy is most effective if each part of the government focuses on what it does best. That means the Fed should focus on stable monetary conditions.

This chart presents an updated look at stimulus spending and unemployment based on the most recent data from the Bureau of Labor Statistics and Center for Data Analysis.