What Focusing on the Economy Could Have Looked Like
Despite Paul Krugman’s lack of imagination President Obama could have easily done more to help the economy in 2009-2010 but choose not to. Defenders of Obama’s failure to do more stimulus point to the fact that Congress probably wasn’t interested in passing another “stimulus bill,” but Congress was approving several important bills that stimulating provisions could have been attached to. The most obvious example is the Affordable Care Act.
During the health care reform debate Democrats faced a very important choice. They could make health care reform about providing immediate help to real people struggling in middle of the worst recession in decades or make sure it had a score from the Congressional Budget Office that sounded “nice.” In their infinite wisdom Democrats decided option B was way more important.
After spending months fiddling with numbers and provisions Democrats did get the law scored by the CBO as deficit reducing and resulting in less than $1 trillion in spending over the ten year budget window. To achieve this game number, though, they had to push back all the major provisions by four years.
Instead Democrats could have written the law to expand Medicaid right away. That way the law would have provided immediate benefits for people and injected about $100 billion into the economy in 2010-2011. A significant amount of extra stimulus even if not the best stimulus possible.