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The shape of the recession
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Saving the real economy
Here are two examples of fiscal action that would be easy to implement, quick to boost spending, and unusual enough to make timely reversal credible.
1: To keep revenue-starved states, cities, and towns from slashing spending and raising taxes, raise by a flat, across the board percentage - say by a quarter or even a half - every cash grant the Treasury makes to state and local governments. An increase by a quarter would boost their revenues by $95bn, or 5 per cent.
2: Reduce by a flat, across-the-board percentage federal payroll taxes. A 25 per cent reduction would increase take-home pay by about $250bn per year. Cash-constrained households, perhaps half of all households, would quickly spend the money. Even most of the rest would probably increase their spending.

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