There’s a lot of empirical evidence and a lot of very knowledgeable people who believe the Obama Stimulus Plan (the general outlines of which are coming into focus) is simply not big enough — not only in overall dollar size but also in the kinds of spending included in it. Paul Krugman has been posting on the issue at his blog, particularly in this post. And this article in the Times covers it more broadly.
The debate about spending priorities essentially comes down to how much bang for your buck you get in economic stimulus terms for tax cuts or rebates (even for middle or low income people most inclined to spend it) versus government spending, especially in the context of a dramatic economic downturn. And from what I can tell there’s a lot of empirical evidence that the latter wins out by a substantial margin.
And yet the desire to get a substantial number of Republicans to vote for the bill appears to be having a big impact on the proposal’s size and shape. Quite likely, leaving it too small and too tilted toward tax cuts to get the job done.
Late Update: Nate Silver has an interesting and at least partly persuasive political interpretation (thanks to TPM Reader EW for flagging it for me) of what’s going on here: namely, that Obama is trying to start low and let the bidding run higher, leaving it mainly to the Senate Dems to do the heavy lifting of bidding the thing up. Remember, Obama himself did seem to hint at such a strategy earlier last week.
If we assume for the sake of the conversation that this or something like it is Obama’s strategy, my reaction is two-fold.
First, the legislative process is always messy. But this is a case where you want it to be as little messy as possible. We’re spending a staggering amount of money here — and for both political and policy reasons, you want it to be focused, efficient (in terms of delivering stimulus) and focused on spending projects that will not only employee people in the medium term but spur efficiencies, economic growth and other good things for the long term. If you get deep into a lot of bidding and horse-trading you get more parochial interests in the mix which cuts against those goals. I don’t say that makes it a bad idea necessarily. But it’s a real concern.
Second, when I write stuff critical of Obama, either on the policy or political fronts, there’s always a rush of emails saying, ‘Give him a chance!’ ‘Leave Obama alone!’ ‘He’s probably got a plan you don’t know about!’ and so on. He may. I hope he does. But all of these debates are dynamic. You never assume anything. If Nate’s right about what Obama’s plan is, having people pushing for something better from the outside is part of it. So under either scenario, holding your tongue makes no sense, in addition to being unethical.
Final Saturday Night Update: Here’s a piece from the Post about concerns about the make-up of the bill.