REVIEWS COME IN…. OK, so the Obama team released a new report (pdf) this morning, outlining the expected effects of its economic rescue package. What are some of the various experts thinking, now that they have a document to chew on? The plan still isn’t ambitious enough.
Paul Krugman, after praising Obama’s team for actually producing “comprehensible, honest” reports like these, instead of “case studies in how to lie with statistics” — Bush gang, I think he’s talking to you — nevertheless concludes that the nation needs a bolder approach.
[E]ven if I use the Romer-Bernstein estimates instead of my own — there really isn’t much difference — this plan looks too weak.
James Galbraith is thinking along the same lines, but seems considerably more pessimistic.
Jonathan Cohn adds, “To sum up, the big question here isn’t really about what the stimulus package will do. As best as I can tell — and I’m sure I’ll hear quickly if I’m wrong — the Obama team, Krugman, and Galbraith all think it will have roughly the same effects. The question is whether the package is sufficient to address the present crisis. Krugman and Galbraith clearly think it isn’t.”
The response to the report from lawmakers will also be of particular interest. Tim Fernholz mentioned this morning that he expects “Democratic members of Congress to look at” the modest expectations from the Obama transition team, “consider their reelection prospects, and wonder if maybe they ought to make the bill just a bit bigger so that unemployment line will drop just a bit lower as voters head to the polls; nothing like seeing self-interest and good public policy go hand-in-hand.”
Right. If Obama is effectively telling lawmakers what kind of performance they can buy for $775 billion, they’ll naturally consider even better performance for a higher price tag.
And as Matt Yglesias noted, that will probably be fine with the new president: “Nothing I’ve heard on the record or off the record from the Transition indicates that they have some kind of dogmatic opposition to a larger stimulus. What they have is a proposal. A proposal made up of a number of component sub-ideas. And they’ve said — repeatedly — that they’re open to additional ideas for more things to do from congress or from outside.”