Suzette Allaire on Stimulus Package |
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This interview is part of the Stimulus Package interview series. This is an interview by OurBlook with Suzette Allaire, a University of Phoenix (Minneapolis campus) economics faculty member.  What do you like about the huge stimulus bill signed by President Obama?SA: I like the emphasis on directed long-term spending to improve our economy. Historically, the "right" government spending can boost GDP and lower unemployment as well as create new industries. This ultimately leads to long-term improvements in quality of life. For example, about $220 billion is targeted for infrastructure, science and technology and education. What don't you like? SA: I don't like the short-term effects tax breaks have. Tax breaks are temporary boosts to GDP. We saw this with the Bush rebate checks. In addition, tax credits increase the deficit, leading to higher debt burdens on current taxpayers and businesses. What impact, if any, will it have on our economy? SA: I don't anticipate any impact until 2010. In addition, the deficit may eventually drive interest rates up as the government competes for money. So some of the impact will be mitigated by our country's need for money. The sooner the tax base improves, the sooner the impact will be realized. In addition to spending, the government needs to consolidate departments and cut out spending programs with no realized benefit in the past five years. Is there anything else government should be doing to help us out of the economic mess we're in? SA: The government's main tools to boost the economy are taxes and spending. If they spend wisely and supervise programs closely, I think they will be doing their best. Do you think the economy can return to where it was a year ago and if so, how long might it take? SA: Perhaps, in about five years. You work for a law firm. How does the present economic situation affect a normally lucrative operation such as that? SA: The legal industry is pretty immune to economic downturns. However, we have noticed impacts to cash flow due to the credit crunch. Is there anything else you'd like to say about the economic crisis facing our nation and the world? SA: It will be interesting to see what happens. I believe out of this recession, new economic models and theories will arise as new paradigms are established. Suzette Allaire is chief information officer for the Lindquist & Vennum law firm. She holds an MBA from Notre Dame in MIS and finance.
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