FIDDLING…. Matt Yglesias has raised this observation a few times in recent weeks, but it’s a good point that bears repeating.
When you see conservative complaining that the stimulus bill is too expensive and won’t be fast-acting enough, keep in mind that had they not blocked stimulus last year on the grounds that it was too slow and expensive, we probably wouldn’t be in a position today where we need such a large fiscal expansion. The further down the spiral you go, the more aggressive you need to get to reverse the vicious cycle and the bigger the threat that eventual recovery will be accompanied by inflation.
Quite right. There are differences of opinion about the merit of President Obama giving Congress a “deadline” on the stimulus package, but the fact remains that policy makers already wasted several months by waiting so long to act.
Last year, as economic conditions were deteriorating, then-President Bush believed no action was necessary (that is, unless congressional Democrats were prepared to make his tax cuts permanent, because nothing leads to success like repeating failure). Democratic lawmakers raised the specter of a modest stimulus — nowhere near the scope of the current proposal from the Obama administration — and Republicans balked.
As Scott Lilly recently explained:
It is unfortunate that government cannot turn on the spigots of job creation more rapidly, and that the damage already done to households and businesses cannot be repaired more quickly. Those were facts that [Rep. Jerry Lewis (R-Calif.), the ranking member on the House Appropriations Committee] and his House Republican colleagues should have weighed more thoughtfully when they blocked a smaller stimulus package in September. Had it been passed and implemented then, money would now be flowing and the precipitous drops in monthly employment that we are now enduring might have been significantly softened.
As our economic conditions worsened, the need for a more ambitious, and more aggressive, stimulus package increased. Last fall, GOP policy makers said Democratic plans were too expensive, and the Bush White House wasn’t even open to the possibility of a recovery package.
They could have saved a lot of money, a lot of time, and a lot of jobs with more forethought in the fall.