There’s no audacity, and little hope, in evolving stimulus package

What happened to “I won”?

This is a pivotal week for the Obama administration’s two-track program to stem the continuing collapse of the U.S. economy, and it’s going to be ugly. The Senate has larded the new president’s stimulus package with an even higher proportion of tax cuts. They’ve excised $40 billion in direct aid to states at a time when a growing roster of states and cities are staring at insolvency. (See the two EPI links below on why this is a very bad idea.) And on Tuesday Treasury Secretary Tim Geithner is due to announce plans for a round of bank bailouts that will far outstrip the remaining $350 billion in TARP money while steadfastly avoiding the takeover of failing banks. 

For all the talk of years’ worth of pent-up Democratic spending proposals in the bill, it’s the tax-cutters who have won the most outsized victory in this fight. This is a pretty stunning achievement. Even as all eyes turn to government to concoct a solution, an ideology born of the wish to make government small enough to “drown in a bathtub” (Grover Norquist) still has one hand, if not both, firmly on the reins. But then no Democrat, including Barack Obama, has really advanced a competing ideology. All through the age of Bush, the Democrats have sought to distinguish themselves from Republicans as the party of greater managerial competency. Iraq and Afghanistan? The Democrats would manage the war better! The economy? Same answer.  

Recommended reading: Paul Krugman’s column (“[H]ow did this happen? I blame President Obama’s belief that he can transcend the partisan divide–a belief that warped his economic strategy”) and blog (“This is really, really bad”). The AP offers a side-by-side summary of the House and Senate bill provisions; Brad DeLong runs down the cuts in the Senate version. The Economic Policy Institute explains why the proposed cuts in aid to states are disastrous [1] [2].

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Comments (5)

  1. Submitted by dan buechler on 02/09/2009 - 09:34 am.

    yeah you and krugman are both right. we were so full of hope. dang it!

  2. Submitted by dan buechler on 02/09/2009 - 10:13 am.

    Maybe we should just abide by Perlstein’s Sunday editorial and opt out of paying anything more than the barest minimal of taxes. And as he so clearly states let the poorest be hit the hardest.

  3. Submitted by Tom Poe on 02/09/2009 - 12:58 pm.

    I’m sure Pawlenty has his grubby paws straining to grab whatever state aid is allocated, in order to position himself as a presidential candidate. If jobs are created, that’s a good thing, but way down on his list of goals. Look for a whole pot of money ending up in campaign related activities.

    Bush was able to create 4 million jobs during his 8 year tax cut approach. There are those who would think that’s a good thing. Compare his disaster with what Democrats accomplished during 8 years of Clinton, though, and if you don’t break out laughing, you need to seek professional help. Clinton managed to create 22 million jobs.

    Take your pick, ideologically-speaking.

  4. Submitted by Bernice Vetsch on 02/09/2009 - 01:35 pm.

    Tom Poe: I wrote Amy Klobuchar yesterday to ask if the Congress could send aid directly to cities/towns/counties and to such state-run programs as Medicaid instead of to governors and the agencies they control. Other monies should be withheld from Minnesota, California and any other state that refuses to re-instate a progressive system of taxation and released only when that demand is met.

    There is a concerted effort by right-wing members of Congress (and helpers like Rush Limbaugh and New Gingrich) to discredit the Obama plan. And when they appear as guests on main-stream media news programs, their views are seldom challenged.

  5. Submitted by dan buechler on 02/09/2009 - 05:12 pm.

    Some of this mess was and is being predicted. Krugman once stated earlier that the Cato institute was putting out feelers to woo a extreme minority of economists who objected to govt. stimulus. Well the cato folks put their ad (where do they get their money?) out today it had 1 only one u of MN professor signing on. I mean the cr-p we’re force fed to listen to. Its like a bunch of john birchers arguing against floridation of public drinking water.
    Bernie and tom you’re correct but we gotta be hard boiled i.e. in this to win long term. Bernie you go a bit too far, please no subsequential posturing needed, release the money now. By the way some roads really are in terrible shape I shudder to think about some of our bridges.

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