I want to appreciate what we get if the Senate compromise bill as it stands now becomes the final version of the recovery bill. It's better than what we would have ever gotten with John McCain as President, and it will do considerably more good.
Herbert Hoover: the Republicans still reverence his economic wisdom
I’m still working on the numbers, but I’ve gotten a fair number of requests for comment on the Senate version of the stimulus.
The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.
According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger. [my emphasis]
Krugman in this post is pretty pessimistic, because he thinks it will be difficult to get the additional stimulus spending that's needed:
The real question now is whether Obama will be able to come back for more once it’s clear that the plan is way inadequate. My guess is no. This is really, really bad.
Still, even the flawed Senate bill is a big step toward a serious recovery program. And I think Obama is likely to keep up the pressure. He seems to have realized already that he has to go "directly to the people" by high-profile speeches and press conferences to keep the heat on his own Party, to fight back against Republican demagoguery, and counteract some of the effects of our toxic media culture.
In a later post, Happy Stan 02/08/09, Krugman is a bit more upbeat on the political prospects of getting through major new pieces of the recovery program. But his reading of the economic numbers stresses how important it is to defeat the Republicans and get the necessary recovery programs through:
I’ve gone through the CBO numbers a bit more carefully; they’re projecting a $2.9 trillion shortfall over the next three years. There’s just no way $780 billion [the compromise Senate bill], much of it used unproductively, will do the job.
The Republicans now are a full-blown Wrecker Party. There's not much potential for real bipartisan cooperation on anything.
I'll give Nancy Pelosi credit: she delivered the Democratic votes to pass the House version of the bill while every Republican voted against it. Harry Reid couldn't do the same in the Senate.
Two things need to change. One is that the Democrats can vote away the filibuster rule by majority vote and they need to do so. Reid and the Senate Dems are now using as an excuse that they need 60 votes to pass anything and that's nonsense. They are even forcing the Republicans to go into actual filibusters. The Democrats using it for an excuse not to do what they were elected to do.
The other thing that needs to change is the Senate Majority Leader. The Senate Democrats still operate on the daffy notion that it's best to select as your main partisan leader in the Senate someone who comes from a state where the Republicans can make a strong and credible contest in a race against him, a "purple" state in the current lingo. This is nuts. Someone like Reid from Nevada has to periodically vote against his own Party on a substantial issue because of state politics. It's just goofy to have him or someone in his position as Majority Leader. Vote him out of that position and put in some Senator who can consistently fight for the Democratic positions and not feel like they have to show how much they can bow and scrape to seek the High Broderist Holy Grail of sacred bipartisanship.
The national news media is so badly broken it often gets discouraging to think about what an gigantic dead weight it is on the country right now. Maureen Dowd's latest is a disjointed rave about what a wimp Obama is and how it's all his fault that the recovery program isn't already passed because he should have pre-compromised with the Republicans even more and blah, blah: Potomac’s Postpartisan DepressionNew York Times 02/07/09 (online date). Of course, MoDo is right in tune with the Republican line that, oh, all these her big numbers and stuff are just so confusin' and we don't know what they're all about: "It’s a huge, scary moment, with trillions of dollars and millions of jobs flying out the window." And, of course, not a word from MoDo about the massive dysfunction of the national press.
And David "Dean Of All The Pundits" Broder writes about how the Republican Party is recognizing that it needs to break out of its Southern Strategy mode, The GOP Faces the Blue WallWashington Post 02/08/09. Apparently for no real reason other than that what the Dean wants to think, because everybody must want to seek that glorious nirvana of Centrism like the Dean himself does religiously.