TW: Brooks writes a rather fretful column on the perils of fiscal stimulus. I would agree Obama is trying to pull off a tough one but I am not clear on just what the alternative would be at this point. Some conservatives advocate massive tax cuts but those would create the same deficit issues created by the massive spending. After having read many economists shoot back and forth on what is more stimulative, my net opinion is that neither works particularly well but tax cuts less well in terms of fighting plunging demand.
Some conservatives also see Obama's efforts as a backdoor manner to bring back "big government" (aka spending other than for fighting the Islamic hordes or promoting abstinence). Some on the left might harbor such ambitions, I have yet to see anything from Obama that would indicate such an ambition.
But something big must be done and done fast. Kudos to Obama for attacking not just the short-term but the bigger issues as well.
From David Brooks at NYT:
"...Today there is wide support for fiscal stimulus. It’s just that there is no historical experience to tell us how to do it, and there is no agreement on how to make it work. The economists’ prescriptions are all over the map.
Obama is compelled to jump into unchartered territory, with no compass or guide. He could have chosen to spend the big money that is apparently required in cautious ways. He could have chosen to pick out a few easily implemented policies that could be enacted in a way that is targeted, temporary and timely. He could have chosen to merely cut the payroll tax, boost aid to the states and do infrastructure projects.
But the Obama presidency is going to be defined by his audacious self-confidence. In Thursday’s speech, he vowed to do everything at once. He vowed to throw the big things into the stimulus soup — tax cuts, state aid, road and bridge repair — but also the rest of the pantry. He proposes broadband projects, special education programs, a new power grid, new scientific research, teacher training projects and new libraries.
...The process, he said, will be totally transparent. There will be no earmarks, no special-interest pleading. In a direct rebuttal to Federalist No. 10, he called on lawmakers to put aside their parochial concerns and pass the measure in weeks.
And as if that isn’t enough, he promised next month to make repairing Social Security and Medicare a “central part” of his budget. “I’m not out to increase the size of government long-term,”
This is daring and impressive stuff. Obama’s team has clearly thought through every piece of this plan. There’s no plank that’s obviously wasteful or that reeks of special-interest pleading. The tax cut is big and bipartisan. Obama is properly worried about runaway deficits, but he’s spending money on things one would want to do anyway. This is not an attempt to use the crisis to build a European-style welfare state.
The problem is overload. Four months ago, no one knew how to put together a stimulus package. Now Obama wants to use it to rush through instant special-ed programs and pre-Ks. Repairing the power grid means clearing complex regulatory hurdles. How is he going to do that in time to employ workers in May?
His staff will be searching for the White House restrooms, and they will have to make billion-dollar decisions by the hour. He is asking Congress to behave and submit in a way it never has. He has picked policies that are phenomenally hard to implement, let alone in weeks. The conventional advice for presidents is: focus your energies on a few big things. Obama just blew the doors off that one.
Maybe Obama can pull this off, but I have my worries. By this time next year, he’ll either be a great president or a broken one."
http://www.nytimes.com/2009/01/09/opinion/09brooks.html?_r=2&ref=opinion
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