October 22, 2025 9:43AM 

# “Temporary and Targeted” Fiscal Stimulus? 

By [Jeffrey Miron](https://www.cato.org/people/jeffrey-miron) 

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![currency, treasury](/sites/cato.org/files/styles/pubs_2x/public/2023-09/federal%20spending%2C%20currency%2C%20getty%20.jpg?itok=T_lBqhGB) 

To moderate economic downturns,

> \[g\]overnments frequently issue stimulus payments.… Economic theory suggests \[such\]… payments should be timely, targeted, and temporary, but elected officials usually decide whether to adopt or repeal these programs.

This means that political considerations likely play a role in the design and implementation of fiscal stimulus. [New research](https://www.cato.org/research-briefs-economic-policy/politics-stimulus-payments) on

> Italy’s 80 Euro Bonus, which originally entailed a monthly payment to all middle-income non-self-employed workers, \[finds\] … that the bonus yielded large electoral rewards for the ruling Democratic Party that persisted for at least five years, which helps explain why a temporary stimulus policy became a permanent benefits program.

Plus,

> targeting poorer voters would have maximized the economic benefits of payments, but electoral incentives pushed politicians to favor middle-income voters who were more likely to reward them at the polls.

So the stimulus was neither temporary nor targeted. Politicians prioritize votes over economic efficiency; the two goals do not consistently align.

##### Related Tags 

[Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Social Welfare and Poverty](https://www.cato.org/social-welfare-poverty) 

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