Obama Inspires Confidence, but the Stimulus Plan Doesn’t
One of the most important things FDR did when he took office was to reassure the public that there was someone in office who cared about ordinary Americans, and who was working on their behalf.
I’ve watched Obama’s public appearances over the past few days and I think he’s doing an excellent job of that. It’s not an easy task — he has to communicate a sense of urgency about passing a stimulus package without panicking people, and at the same time quell the crisis of confidence that keeps them from spending and money out of circulation. Obama’s clear compassion, his obvious intelligence and his reassuring manner have been impressive.
There are, however, serious concerns about the details of his stimulus package. Many are worried that it won’t be enough to get the economy moving, and express doubts about the amount allocated to tax cuts. Kent Conrad and Ron Wyden have already questioned the wisdom of $310 billion in tax cuts out of a $775 billion plan. (For the sake of scale, remember that Obama’s health care plan was supposed to be between between $55 and $60 billion a year when fully phased in — something conservatives said we simply couldn’t afford.)
There also have been suggestions that the plan’s inclusion of large business tax cuts, which add to its cost but will do little for the economy, is an attempt to win Republican votes in Congress.
But it isn’t just people on the "left" who are voicing these concerns. Mark Zandi of Moody’s, a Republican who was an economics advisor to John McCain, said this on Wednesday:
"This economy is shutting down," said Dr.Mark M. Zandi, the chief economist and cofounder of Moody’s Economy.com, who predicted that the economy stands to lose 500,000 jobs a month for the foreseeable future. While both spending and tax cuts should be including in a package, spending provides a higher rate of return than tax cuts. Each dollar spent yields a return of $1.50 in economic growth; while each dollar in tax cuts yields $1 return.
Zandi has also said in the past that food stamps are the best bang-for-the-buck stimulus, but considering the fact that it would make Republican heads explode outright, Obama didn’t even go there.
Obama faces a tough battle getting a stimulus package passed in a timely fashion. But much has been made of the "competence" of his staffing choices, and his desire to favor pragmatism over ideology. Considering the price tag — not to mention the cost to the country of getting it wrong — is it wise to be held hostage to failed Republican political philosophies in order to buy a "consensus" of 80 Senate votes we don’t need?