Now in physics when you say x will happen and it never does, in fact NOT x happens, one must go back and review the theory. Apparently this does not apply to macro types, especially ones with rather large egos. I have seen lots of types like this but they are also right when they predict some outcome. When whatever you predict never comes about one would think some humble pie is in order. Does not seem to be the case here.
As the wizard of Cambridge says:
There are multiple aspects of this question. First, the administration proposed considerably more than Congress was willing to enact. Taking account of the addition of the AMT, the Administration’s Recovery Act proposals were cut back by about 20% in the process of passing Congress by very narrow margins.
Second, the President’s economic team advised that there was essentially no danger of excessive fiscal stimulus in 2009. I joked at the time that worrying about overdoing fiscal policy was like my losing too much weight and becoming anorexic — a conceivable possibility, but very far from the dominant risk. The President’s political advisers — rightly in my view — constrained the initial stimulus proposals to avoid sticker shock and rejection or great delay on Congress’s part.
Third, politics aside there were difficulties in moving spending rapidly in 2009. So-called shovel-ready projects often were not in fact ready to go. Almost everyone close to the process feels that (the VP) and his team did a very good job of moving the stimulus money through the system and, as a consequence, money moved more or less on the schedule we projected in 2009. They would be the first to say that it would not have been possible to move vastly more money into quick trigger infrastructure projects. Of course it would have been possible to increase the tax cuts or assistance to state and local governments, but there were severe political limits in both those areas.
Fourth, we believed in the winter of 2009 that if, as seemed likely, more stimulus would ultimately be required, it could be passed through the Congress using the unemployment insurance extension for 2010 as a vehicle. This view proved incorrect. The administration proposed and the House passed in the fall of 2009 a substantial further program with respect to unemployment insurance, job incentives and infrastructure. Unfortunately it did not pass the Senate and the focus has shifted very much towards deficit reduction rather than job creation. It is fortunate that the President was able last fall to lead an effort to pair extended tax cuts with payroll tax reductions — without that stimulus we might be looking at a double dip today.
Second, the President’s economic team advised that there was essentially no danger of excessive fiscal stimulus in 2009. I joked at the time that worrying about overdoing fiscal policy was like my losing too much weight and becoming anorexic — a conceivable possibility, but very far from the dominant risk. The President’s political advisers — rightly in my view — constrained the initial stimulus proposals to avoid sticker shock and rejection or great delay on Congress’s part.
Third, politics aside there were difficulties in moving spending rapidly in 2009. So-called shovel-ready projects often were not in fact ready to go. Almost everyone close to the process feels that (the VP) and his team did a very good job of moving the stimulus money through the system and, as a consequence, money moved more or less on the schedule we projected in 2009. They would be the first to say that it would not have been possible to move vastly more money into quick trigger infrastructure projects. Of course it would have been possible to increase the tax cuts or assistance to state and local governments, but there were severe political limits in both those areas.
Fourth, we believed in the winter of 2009 that if, as seemed likely, more stimulus would ultimately be required, it could be passed through the Congress using the unemployment insurance extension for 2010 as a vehicle. This view proved incorrect. The administration proposed and the House passed in the fall of 2009 a substantial further program with respect to unemployment insurance, job incentives and infrastructure. Unfortunately it did not pass the Senate and the focus has shifted very much towards deficit reduction rather than job creation. It is fortunate that the President was able last fall to lead an effort to pair extended tax cuts with payroll tax reductions — without that stimulus we might be looking at a double dip today.
Fortunately we did not go over the cliff. Anyone who has worked in capital intensive industries knows the lead time. If you have never done a real days work then you would have no clue. So, shovel ready, great phrase, totally empty.
Imagine more stimulus. There is some crazy assumption that by the Government putting money in the hands of those ill equipped will somehow generate business is insane. Just look at the broadband program. One suspects that most of that money will be totally wasted. I suspect so.
And yes, perhaps there are some people who should worry about weight loss!
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