Ezra Klein sums up the current state of the union as briefly and accurately as you could hope for:
When they were asked about shifting their focus to the future when the economy was so bad in the present, they explained that they got pretty much everything they thought they could get — and, in fact, more than they thought they could get — in the tax-cut deal, and it was time to let that work. Left unsaid is that they can’t get anything more out of a Republican House, and so there’s little point in begging.
In the meantime we’re treated to Republicans repeating the words “failed stimulus” over and over as if they cannot be used separately, in spite of the fact that state governments all over the country are facing massive deficits in the absence of the federal stimulus dollars that saw them through the worst of the crisis.
January 26, 2011 at 4:54 pm
Perhaps some think the stimulus is a failure because they realize that a lot of that money was just going to the states as a bailout and once it that money ran out we’d be in this spot watching the states fail. That’s a good $300-400 billion wasted to accomplish very little other than allow the states to punt the hard decisions down the road two years. I don’t call that a “success”. Is it working as intended? I guess, but that’s part of the reason I was against the stimulus to begin with, because it’s intent sucked and doomed us to spend all that money and end up exactly where we are. It was inevitable.
January 26, 2011 at 5:52 pm
We should be borrowing another $400bn and pushing it to the states again, and keep doing it until the economy grows enough that natural tax revenue can cover it. (I would give it out with strings attached in terms of a base required tax level to cut out all the race-to-the-bottom state-by-state tax stuff that businesses have been exploiting.)
There is only one solution proven to work when you’re in a big recession like this: spend like a drunken sailor on useful investment goods. That’s what China has been doing, that’s what the US used to do whenever this happened, that’s what we should be doing now.