About 90% of the people I communicate with on a typical day are political junkies. They follow politics, they have political jobs, they canvas and otherwise volunteer for candidates, they contribute money and they follow the course of political events on a variety of media and with personal and professional networks.
But the collective reaction of most of those I've had contact with in the past 72 hours is the same whenever I mention the stimulus package: Their eyes glaze over. How do I know since I'm not actually face to face with more than a handful of such people each day? I hear it in their voices and read it between the lines of their e-mails and instant messages. I can just tell.
It's not hard to figure out why. The House version - H.R. 1 - that passed with no Republican votes last week is $819 billion. Bil-yuns. The Senate version - S. 336 (here's the summary) - is $888 billion in its current form, with plenty of amending yet to come. Bil-yuns. Add either of those totals to the $750 billion for the Troubled Assets Relief Program and you've got $1.5 trillion. How can anyone's eyes not glaze over when we're talking not just billions but tril-yuns lately? Ultimately $3 trillion for the Iraq War by some accounts, $1 trillion in Cheney-Bush tax cuts for the ultra-rich, $2.4 trillion handed out to troubled financial institutions by the Federal Reserve, a possible $2-$4 trillion for a "bad bank." The numbers fail to mean anything any more.
In spite of the stunning nature of these figures, many people - especially left-progressives - are wondering if the stimulus package will be enough to do the job being asked of it. And we're worried that if isn't enough, it could harm the Obama administration's future prospects.
Two of those quoted by Arianna Huffington in a column Monday have it exactly right, in my view:
"I support the stimulus package," Van Jones, author of The Green Economy, told me. "But when I look at it in its entirety, I fear that we may soon look back and say that we missed a huge chance to go bigger and bolder. After all, there were three flaws with the old economy that has crashed: it favored consumption over production; debt over smart savings; and environmental damage over environmental renewal. Some parts of the stimulus package seem to be more of the same -- trying to prop up the old, failed economy. That strategy simply won't work -- but we could waste a lot of money and time trying. Instead, we need a new direction for our economy. You can't jump halfway across a chasm -- you just end up falling into the abyss."
Rick Levin, president of Yale and an economics professor, echoed Van Jones' call for "bigger and bolder": "First of all, there's a question of magnitude. The overall stimulus is about 6 percent of GDP. We did not exit the Great Depression without a stimulus that amounted to about 25 percent of GDP -- we called that World War II... The second problem is with the mix... Only $335 billion worth goes to job creation -- that's about 3.5 million jobs, about $100,000 a job. Three-and-a-half million jobs is only two percentage points on the unemployment rate. That's not enough. I would get rid of the tax cuts and use the entire package for job creation... There are lots of great public works projects that would be well worth supporting. And, in the near term, what about CCC-type activities that put people to work right away, cleaning up public parks, weather-stripping homes, offices, schools, government buildings?" ...
Joseph Stiglitz is equally leery of the tax cuts that have been included in the stimulus package. "We are in uncharted territory in this crisis," he says. "But household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment... Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place."
Right now the recovery and investment act is a bag partly filled with sugar and partly filled with shit. So Stiglitz is right, economically speaking. But politically speaking, hacking those tax breaks out of the recovery and investment act isn't going to happen. Bad idea or not, Obama has chosen to stick with his bipartisan approach, which means those tax cuts are going to stay, perhaps even be expanded. The problem is, as BruceMcF has pointed out in a excellent Diary on transportation stimulus at Congress Matters, every dollar that goes to tax cuts means less money for infrastructure because of the desire to keep the total bill about the same. He was speaking of the House bill, but the same applies to the Senate.
If only there were some braver souls in the Senate who would take up the bolder, bigger campaign and make a good case for it. Keep the tax cuts, but add a good deal more stimuli. Thus would the sugar-to-shit ratio be improved. What's the right amount? $1 trillion? $1.2 trillion? Unknown, to be sure. But, as Paul Krugman and other economists have pointed out now for months, the Roosevelt administration's biggest mistake during the New Deal was not spending enough quick enough. We can't afford to make the same mistake. Obama has the popularity to use his bully pulpit to avoid under-stimulating the economy. But the weight shouldn't be totally on his shoulders. Democratic Senators should step up, too.
The argument will be made, of course, that the Senate will never pass a larger bill. That boosting the total now will only make a filibuster more likely. And that even if a larger bill were to clear the Senate, it would never clear the House-Senate Conference Committee. Perhaps that's true. But it can't be certain until it's tried. If such an effort were to fail, then the weak and deeply flawed package the Senate is now considering provides the fallback position.