Rather devoting $1 trillion dollars to deficit spending, as Mitch McConnell warns us that Obama's stimulus package is wont to do, perhaps instead Obama should limit the package to $675 to $775 billion and devote a significant fraction of that to tax cuts rather than spending increases.
Wait, that's already what he's planning on doing?
Ssssshhh. Better not tell McConnell.
The numbers we're playing with are so large here -- so large as to seem almost abstract -- that one gets the sense that whatever Obama calls for, Mitch McConnell will simply call for 40% less. So if Obama calls for a $1 trillion stimulus, McConnell will call for $600 billion instead. And if Obama calls for a $800 billion stimulus, McConnell will call for $480 billion instead.
If I were Obama, and what I actually wanted was an $800 billion stimulus, I might have someone whisper some off-record comment to Adam Nagourney about a $1.2 trillion stimulus just to frame McConnell's expectations accordingly. Then Obama can force the GOP into the position of accepting a compromise which it doesn't really want.
12.30.2008
Obama FTW
@ 12:27 PM
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45 comments
first.
McConnell is dumb
@Nate: typo "stimuklus".
Republicans <3 obscurity.
That's the only logical conclusion one can come up with.
I think Nate is correct that the GOP wants to seem "fiscally responsible" which means cutting down whatever Obama suggests. However, they don't want to be a roadblock at this point, since they are no doubt hearing screaming from constituents about the economy (and screaming from would-be public contractors who want the money).
Freddie and Fannie own all the mortgages, so why not just give everyone who owns a home a 4% or 4.5% mortgage (essentially a buy down). That would be a long term boon to the economy, and it has the added benefit of directly addressing the housing crisis.
For those who rent or own, they get a stimulus check.
This would be a much longer term help to the economy, and would help with the housing crisis directly. It would also likely cost less.
Huh? CNBC just reported that Blago might appoint a former IL AG to Obama's senate seat (WOW!). Roland Burris is African-American.
As glorious as the smash-mouth victory the dems had in November, I'd give up a lot to see McConnell sent packing. Here's hoping for a career ending scandal for the prick from Kentucky.
Burris only wants to serve the two year term, and not run for re-election.
tax cuts will not work.
for those unemployed or under employed or about to lose their jobs, for businesses going under -
TAX CUTS WILL NOT WORK!
we need JOBS.
which part of jobs do the repubs not get?
a stimululs check will help.
i know i need one
if obama fails at saving america from the next depression (might already be too late) he has to think and act big. repubs are thinking small.
i want change i can believe in.
i want massive change.
we are in a heap of trouble here
Well, Fred, guess I was wrong and Blago is ignoring his attorneys' advice:
http://blogs.abcnews.com/politicalpunch/2008/12/blago-to-appoin.html
Kennyb-
It is a smart move for Blago. If Burris is seated it will take the national spotlight off Blago and remove the major reason to get him out quickly.
I'm dumbfounded on this Blago/Burris thing, but maybe I don't get Chicago politics. Why would Burris accept such an appointment, thus casting himself as a pawn in Blago's ego trip and PR game, and as a thorn in the side of the Democratic Party? Then again, why would Blago announce the appointment without assuring that Burris would accept ahead of time. If he declines, it demonstrates Blago's utter isolation and pariah-status.
Well, Fred, guess I was wrong and Blago is ignoring his attorneys' advice:
I win! A couple of weeks ago someone remarked that Blago had said he wouldn't appoint anyone, and I made the correction that his attorney had said they had advised him not to appoint anyone, but there had been no actual word from Blago himself.
I still didn't think it was likely that he'd do it, but I never put it past him.
AARGH. WTF is with this sudden "fiscal responsibility" on the part of the Republicans - the same Republicans who have been blowing public money like a drunken sailor for the past eight years to the tune of $10 trillion?
So it's okay to spend $12 billion a month on a futile war in Iraq, but we can't fund basic infrastructure development and maintenance here in the U.S.?
*head explodes*
McConnell should be tarred, feathered, and pilloried.
No Fred, Burris will not be seated, at least not without a long, protracted court fight (and who will be funding that, I ask?):
Senate Leadership: Burris 'unacceptable'
The Senate will not seat Roland Burris if Illinois Governor Rod Blagojevich attempts to appoint him, a Democratic leadership aide said.
Majority Leader Harry Reid views Burris as "unacceptable," the aide said.
By Ben Smith 01:04 PM
http://www.politico.com/blogs/bensmith/
McConnell is dumb
Unfortunately, he's not. He's pretty much an evil genius when it comes to manipulating Senate rules. Fortunately, Obama is probably his equal in tactical maneuvering, but we definitely haven't seen the end of this.
Yes, Redshift, that was me, and I eat crow now. To be fair, I did qualify my prediction by prefacing it with the clause, "Assuming Blago is not insane..."
Kennyb: Quite true, and we certainly don't have a definitive verdict on that clause yet.
kennyb- but havent people in IL been saying for some time now that Blago was insane?:0
AARGH. WTF is with this sudden "fiscal responsibility" on the part of the Republicans - the same Republicans who have been blowing public money like a drunken sailor for the past eight years to the tune of $10 trillion?
Blatant hypocrisy? Bald-faced lying? It doesn't surprise me that they do it, since it appears to work, what does surprise me is how many people still associate "fiscal responsibility" with the GOP, when they haven't practiced it in a generation. It demonstrates the power of branding, I guess, and how successfully they've defined "fiscal responsibility" to mean "tax cuts," even if they massively increase spending.
Burris ran against Blago in the 2002 gubenatorial primary. Burris has a long history in IL and is generally viewed as outside the machine. I don't think he has ever been tainted.
He did run for Senate too, in the '90's.
Burris has never had a rumor of scandal around him that I know of...
I bet he gets seated....right now folks are still angling to stop Blago from making the appointment. If he does...I bet they seat Burris.
I would bet money - if I had it - that the following happens with Blago and Burris:
* The IL Legislature vows to press on with impeachment, even though Blago has done the ultimate a**h*** thing and appointed someone to Obama's seat anyway.
* Blago's choice, despite the ineffective Harry Reid's admonishment that nobody appoint by Blago will ever be seated, will definitely be seated. I think a larger percentage of Repubs will seat him, because they already know (may have figured out) that many Americans view their party as, well, not a party for African-Americans. Since they probably suspect that the Dems will not seat any Blago choice (which they seem to be sworn to follow through on), the GOP sees an opportunity to paint the Dems as both racist and obstructionist.
*Enough Dems will vote for Blago's appointment just to end this mess.
*Blago remains governor of Illinois, because the legislature sees no real reason to get rid of him anymore.
*Blago gets off scot-free and remains governor, a testament to the embarrassing corruption in the Illinois political machine.
Great prediction, you may very well be right.
I also bet Blago is not convicted for the Senate selling stuff,but he might go down on other things.
WOW! Blago is going to make the appointment in one hour at a news conference.
I don't think that's a great prediction at all, John & fred.
Let me be the first to ask (unfairly): How much Burris paid Blago for the appointment?
It's not the qualifications of the appointee, it's the whole idea of letting Blago appoint someone to a position he tried to sell a few weeks before. No one sees the stink around that?
Mule Rider? I thought you withdrew from the fray? I sense more than a little Nate-envy....
But back to the topic -- I vote for lots and lots of infrastructure. Americans are feeling poorly about themselves, and it is time to step up and get our systems moving, or modernized, or whatever they need. Fix the pot holes!
LOL! That MuleRdier (MR) statement is truly hilarious coming from MR, our resident troll!
Go Nate!
Kennyb-
If it was almost anyone but Burris I would agree, but Burris is untainted. He is also a Blago foe, who ran against him.
Spock?
Why not just look at Japan and Sweden who just went through this. Sweden had the gov take over the banks and came out quickly, Japan did not and was mired in it for years.
We also have a much better financial system than we did in the '30's - at least when it is functioning.
Nate: 'wont' is a great word, but it just doesn't work there. Wont refers to a general tendency, not to a theoretical likelihood; 'is wont to do' doesn't mean "is likely to do" but "usually does." Since there has never been an Obama stimulus package before, it needs to be either "stimulus packages are wont to do" or "Obama's stimulus package is likely to do."
</grammar nazi>
I think it's fairly clear that one can spend one's way out of a depression. That's just what we did in WWII. The problem with FDR's depression moves was that he didn't spend enough.
Mule Rider is going to be very disappointed to find that the people in charge of this country agree with me and not him.
Kennyb,
I don't necessarily think what I said would happen makes sens. But I still think this is going to happen. This is an extremely odd situation. And what Fred said: maybe you'd have something with most other candidates, but with Burris, Blago specifically chose someone the Democrats would have difficulty rejecting.
Nice parroting of the current conservative claptrap, MR. The idea that "the market" is more in the business of helping "the many" than government is particularly amusing.
When your strongest argument is "the Great Depression might not have been as bad if the government had done nothing, but who knows," you're treading on pretty thin ice. Unfortunately for you, the current conservative canard that FDR made the Depression worse is mainly being argued by political operatives like Grover Norquist supported by cherry-picked statistics, and the counter-argument is mainly being made by Nobel Prize-winning economists with a bundle of historical data to support it.
After the trashing the economy has received from unregulated derivatives markets established under the market-worshipping dogma that government regulation is always bad, the vast majority of Americans have gotten a clue. You might want to try it.
(Oh, and please go ahead and claim impressive credentials that are impossible to verify in an anonymous forum. Argument from authority is always soooo convincing...)
My biggest fear is that we haven't fixed much of what got us in this mess to begin with, namely easy credit. Sure, the banks aren't lending now, but once they do, what's to stop the next bubble?
I hope you are wrong, Nate, that most of Obama's stimulus package will go to tax cuts rather than spending increases. Last night on Maddow's show, Paul Krugman argued strongly that tax cuts are the wrong way to go because then the government can't ensure the money is spent in a way that creates jobs and invests in the country.
obama fcuk the world?
@Scott D:
Nate said "significant fraction", not "most", of the stimulus package will go to tax cuts. Remember that Obama promised a middle-class tax cut for those earning less than $200K/year. That will be considered part of the stimulus package.
@Scott E:
I think "Obama FTW" in the title of this post meant "Obama for the win!"
Nate, I love you, but you are wrong on the tax cuts. The long term problem that the nation faces is too LOW a level of national savings. Any solution to our short term problem (ie the recession) will involve a reduction in national savings for any given level of GDP because the solution will necessarily involve an increase in the government deficit. The trick is to keep the short term decrease in national savings as small as possible while still propelling the economy back to full employment. Government spending does this MUCH more effectively than tax cuts because: 1) Government spending has more "bang for the deficit buck" in terms of increasing aggregate demand, employment and GDP, and 2) Government spending can be on capital projects which increase national savings. We DON'T want to encourage consumption with tax cuts or otherwise - that has been the biggest structural problem for the economy since the 1990's. Having taken Macroeconomics at the University of Chicago, you can be forgiven for not knowing any of this, so you're still a hero.
test
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