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Should Obama Have Weakened The Stimulus Even More?

Jonah Goldberg says that President Obama would have been in better political shape if only he had agreed to cut some taxes as part of his economic stimulus measure:

Just go back to the stimulus bill. It seems to me that the conventional wisdom among Republican strategists and folks on the Hill — at least among those I talked to or read — was that Obama could have done lasting damage to the GOP if he'd only been willing to co-opt Republicans with some tax cuts and other Republican or centrist sops. That would have made it very hard for Republicans to run against Obama in 2010, at least with the stimulus as an issue. Instead, he handed the whole thing to Democratic bulls. Now, the stimulus bill looks like a failure and a cravenly political pay-off to Democratic interest groups and ideologues (who now complain it was too small) and Republicans have it as a useful issue.

But, uh, Obama did try to co-opt Republicans with some tax cuts. Forty percent of the stimulus consisted of tax cuts! Republicans still voted against it en masse. Also, contra Goldberg's implication that liberalideologues only now say the stimulus was too small, anybody who followed the debate realizes that liberals were saying this, loudly and repeatedly, all along. It's depressing to argue about a policy with people who don't seem to follow even the basic contours of the debate.

Substantively, of course, Goldberg is making all sorts of objectionable assumptions about the stimulus. The point was to cushion the blow of the greatest economic calamity since the Depression; nobody thought it could completely halt the rise in unemployment within a few months. It was also clear at the time that the stimulus would make it easier for Republicans to blame Obama for whatever economic ills followed the recession he inherited, though Goldberg doesn't ponder whether failing to take stimulative action would have also exposed Obama to blame. Basically, Obama was going to see his approval ratings drop no matter what--there was just nothing he could do to keep the economy from getting worse for a while. So he decided the best course, substantively and politically, was to follow the advice of mainstream economists and try to help fill in the masive hole in demand, in the hope of cushioning the blow over the next two years as best as possible. Clearly Goldberg doesn't share the premise that this would actually work. The odd thing is that he doesn't even seem to consider the possibility that Obama believes it.

--Jonathan Chait