Paul Krugman is not happy. He argues that the compromise stimulus package isn’t enough to do what needs to be done, and the president wussed out.
Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.
Yet the centrists did their best to make the plan weaker and worse.
But how did this happen? I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy.
After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy’s dire straits and his own electoral mandate.
Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would. Not long ago administration strategists were talking about getting 80 or more votes in the Senate.
Mr. Obama’s postpartisan yearnings may also explain why he didn’t do something crucially important: speak forcefully about how government spending can help support the economy. Instead, he let conservatives define the debate, waiting until late last week before finally saying what needed to be said — that increasing spending is the whole point of the plan.
I would not presume to argue with Dr. Krugman on economic theory, but I think he’s being a tad short-sighted on politics. With any luck and good planning, this stimulus package is just the first step, and once it is passed, there will be a foundation for more that could fill the gaps. Unlike Dr. Krugman, I don’t think this was the last best hope. I think it was just the first shot.
And the next time, the approach doesn’t have to be so showily “bipartisan.” The president can now say with a great deal of credibility that he made every effort to work with the Republicans and they behaved like cranky children. So the next time he’ll drop the kid gloves and go ahead without them: “Hey, I tried, and all they did was throw a fit. The hell with them.” After all, there comes a point when reason and common sense just don’t work.