I don't get this argument.  If it's hard to spend more than $300 billion at a time, why are we forcing ourselves to? It sounds like those extra $475 billion will be of little value, and we're truly throwing money at the problem.

I know that a good number of folks are feeling a bit queasy about the tax cuts, thinking that Obama is perhaps offering up too many of the stimulus dollars, in ways that may not provide the desired and immediate bang for the buck, as a sop to the Republicans.  Yet I can't shake the feeling that perhaps Obama has learned the lessons that previous administrations did not learn, that even though you may have the votes (in a squeaker) you haven't won the argument (or even bothered to listen to the other side of the aisle), and thus you must make some attempt at compromise.  

Yes, I know, the Republican way of business hasn't worked as of the last, well, probably since Reagan.  Does this mean that you simply push them aside, ignore their ideas, and bull ahead as if you have an overwhelming mandate to do so?  Perhaps, if you were somebody other than Obama.  A great many political junky types may hate the kinds of plays that Obama makes, but they often seem to work.  This guy is a bridge-builder.  Whether we like it or not.  

What we don't know, yet, is whether it will be effective, whether it will be a good governance idea, and whether it will be good for the economy.  We simply don't know.  

What we do know is that it is different than the way politics is usually played and thus we are inherently skeptical.  Mayhap we ought to give it a go, and then berate Obama's foolish centrist-idealistic-post-partisanship if it fails spectacularly.  Or, if it works, mayhap we should grudgingly acknowledge that perhaps Obama knows what he is doing.

Regardless, Obama is attempting to make this deal in such a way that only the true hardliners (both on the left and the right) are out in the cold.  I would imagine that Obama wants a bill passed with huge numbers so that he can turn to the American public and say, 'ok, these yutzes have done their work, now lets do ours.'  

I realize I need to self-edit, but I really think that this problem is so huge that Obama is willing to sacrifice the perfect for the sake of the good, even if that means a package that isn't exactly what he wants, or what Krugman's of the world think we need.  Krugman is brilliant, and usually right, but that does not mean he could get a bill passed.  

Wow, Jonathan, they obviously have very little faith in your ability to comprehend the subject matter.

"It sounds like those extra $475 billion will be of little value, and we're truly throwing money at the problem."

If I am parsing the paraphrasing correctly here, they're saying that they are avoiding "truly throwing money at the problem" by putting the extra money into tax-cuts instead of over-funding the government projects.

Spinks, I'm not suggesting over-funding any project.  I'm suggesting not spending more than $300 billion at all, if we can't put it to good use.  I'm not sure if $300 billion in tax cuts are a good use.

The best way to go would be to cut payroll taxes, that way only those who actually work will merit a cut as opposed to career-welfare people who don't. Yes, there are those with a very low-income job who escape paying income tax, but they don't escape payroll tax, so, in my book, even they are worthy of a cut, and so are those receiving unemployment benefits because they at least had to have actually worked a job to get those temporary benefits. But individuals and households who aren't working now and weren't working before should get zilch, which I think any fiscal-responsible person could agree with.

From a policy perspective, I was sorely disappointed about the introduction of tax cuts to the stimulus package at first, then I read more of the details and I've come around to thinking that there's quite a bit of tax relief here that's good policy on the merits (like the payroll tax holiday for those qualifying for the EITC), and that the pure political grease in the proposal (such as some of the business credits) is worth the heightened chances of quick passage.

As for the question of why Obama is seeking 80 Senate votes when he could get this through with just a handful of GOP crossovers at most, I think he's looking long term to 2010 and 2012 and wants to undermine any potential GOP foils before they sprout legs. The failure of the auto bailout was proof positive that the GOP, desperate to find political direction after their thumping two months ago, is settling into a routine of playing spoiler to Congress' fiscal policy ambitions as a way of bolstering their small government bona fides. But here it's not even that the GOP could block the stimulus -- it's certainly possible that they could muster more than 41 votes and just defeat it outright, though probably not likely -- it's that the stimulus bill could become for future Republican candidates in 2010 and 2012 what the AUMF was for Democrats this year: a litmus test that pits the establishment against the idealists and becomes a raison d'être for many a candidacy. I could easily imagine a GOP primary in 2012 where one of the most salient questions revolve around where each candidate stood on Obama's stimulus. If the bill was purely and completely an injection of public funds, then I could see opposition to it being rewarded four years hence as prescient and principled. But what if the bill allocates almost half of its funds to tax cuts, THE lynch pin of the libertarian right, and in so doing brings in not 5 but, say, 25 or 30 GOP senators? Suddenly, Obama's deprived oxygen to a potential rallying cry for his future opponents and in the end sacrificed very little by way of principle. Very shrewd and far-sighted.

"I'm not suggesting over-funding any project"

My apologies, that is exactly what I thought you were saying.

Kevin, cut the payroll tax??? You've got to be kidding. Just ask any congressman and he will swear that the payroll tax and the self-employment tax were handed down to us from Mount Sinai on stone tablets.

Whoever coined the expresion, "economics----the dismal science" was being much, much too generous.

There are so many historically twisted contingencies marbled through and through the "theories", the "lessons from the past", the politics of power, the lobbying, the earmarks, the insider trading, the corruption etc., that no one [not even those who cranked out the complex mathematical models from those really, really sophisticated computers] even came close to predicting a year ago what is happening right now.

And that's before we take into consideration the most convoluted varible of all: human psychology.

All the social sciences are oxymorons. They are to natural science what astrology is to astronomy.

And when people ask, "will it be effective?", "will it make things worse?" they often leave out the most relevant question of all: "for me?"

Obama has to reconfigure the Monopoly game so that the bankers [and the banker's pals in government] who control the money, make a pie in which more of the crumbs go to more of the people in need.

Otherwise the middle class may buckle. And if that happens, the ensuing anger may metastasize into a political reaction that is sharply more authoritarian. And from the right, not the left.

george walton

We need expensive, low-impact tax cuts because we just can't spend money fast enough to stimulate the economy? That's great news! Apparently, we've already provided comprehensive health care for every man, woman and child in America! Otherwise, it wouldn't be hard to figure out where to spend the money, would it?

Bdgreen, that's what I've been meaning to say. What's magical about $775 billion that it must be spent hell or high water?

Other commenters have said the tax cut proposals looks good, I'll keep an eye out.  And I understand how payroll tax is regressive,  but I don't understand how eliminating it will put more money in the hands of the poor? Corporations won't turn just increase salaries by whatever they save in payroll taxes.  I suppose by making it progressive it could incentivize cos. to offer lower-paying jobs.

sat writes:

Bdgreen, that's what I've been meaning to say. What's magical about $775 billion that it must be spent hell or high water?

George responds:

That's what they said about Henry Paulson's number too. Why give 700 billion dollars to the folks on Wall Street? Why not 701 billion instead?

Well, I have a source I'll just make up in the White House who claims that Bush figured any number higher than 700 billion might just anger the public enough to actually demand an accounting of who got how much and what they did with it?

But that was almost certainly being paranoid. American citizens get pissed off when their team doesn't make to the Super Bowl...they get outraged when their favorite performer is voted off American Idol...they can become down right livid when someone wishes them a happy holiday instead of a Merry Christmas.

But getting enraged because the superrich and their political enablers in Washington are piling the stacks of hundred dollar bills up to the ceiling?

Hey, what do you think this is, the 60s?

george walton

If you bring 10K to Vegas rather than 5K are you more likely to come out ahead? We're not going to spend our way out of this problem.

No one I know is spending money on anything because they're scared. There is no longer any real confidence in government or business. Crony Capitalism has brought America to its knees. Trust between employer/employee, the governed and those in power, between rich and poor, you name it, it's eroding. Obama has to complement all of this money talk with some serious ass-kicking. But does he have it in him  to get tough with the scoundrels who got us into this mess?

The choice of Mary Schapiro to head up the SEC is very discouraging on this front. She's a Crony Capitalist of the first order, a real toady to Wall Street.

Not to mention that Schapiro was heading up FINRA while failing along with the SEC to uncover the Madoff scheme.

Another thought occurred to me reading this morning's stories about Obama's trip to the Hill