A Wall Street Journal editorial today prescribes a stimulus policy that flatly contradicts the advice of economists as ideologically diverse as Larry Summers and Martin Feldstein. Messrs. Summers and Feldstein are both acclaimed tenured professors in the Harvard University Economics department. Their views on economic policy are as different as Maynard Keynes' and Adam Smith's. But when it comes to stimulus package recommendations, they sound like peas in a pod compared to the knee-jerk hacks that sit on the WSJ editorial board. Summers, Jan. 6, 2008: fiscal stimulus, to be maximally effective, must be clearly and credibly temporary — with no significant adverse impact on the deficit for more than a year or so after implementation. Otherwise it risks being counterproductive by raising the spectre of enlarged future deficits pushing up longer-term interest rates and undermining confidence and longer-term growth prospects. a programme of equal payments to all those paying either income or payroll taxes combined with increases in unemployment insurance benefits for the long-term unemployed and food stamp benefits. Such a programme could be implemented quickly and would largely benefit those most likely to be cut off from credit markets and with the most urgent need to spend. It could easily be made temporary. Interestingly, Mr. Feldstein suggested, Jan. 10, 2008 ... that Congress enact a quick tax rebate or other tax cut for households to go into effect only if three straight months of shrinking employment confirmed that it was needed.... Liberal economists say boosting food stamps is one of the most efficient ways of pumping money into the economy, an idea surprisingly embraced by GOP economist Martin Feldstein at a Brookings Institution forum on Thursday: "The fiscal stimulus would automatically end when employment began to rise or when it reached its pre-downturn level." Now, the Journal: A real fiscal stimulus is one that immediately and permanently changes the incentives for individuals and business to work, invest and take risks. As for a stimulus now, one that works would be marginal (at the next dollar of income), immediate and permanent. A proposal to bring the U.S. corporate rate into line with the rest of the world would help, and even better would be an across the board cut in income taxes to 30% from 35%. That would be real recession insurance. [emph. added] I suppose a permanent stimulus package would make sense to combat a permanent recession. I happen not to share the Journal's degree of pessimism that would support its policy prescription. And a stimulus package designed to promote investment rather than consumer spending sounds equally nonsensical. And I am in good company. Even Feldstein, the chair of Ronald Reagan's Council of Economic Advisers, urges a trigger to make sure the stimulus is not permanent: "the fiscal stimulus would automatically end when employment began to rise or when it reached its pre-downturn level." Once again, the Journal seems intent on inflicting permanent damage on its editorial credibility.