Obama’s Stimulus Package

Barack Obama is giving — as I write — what his transition team is calling a major speech on the economy and its need for a stimulus package.

From a Washington Post article:

Obama warns that failure to pass the plan — expected to cost as much as $800 billion — will plunge the nation further into an economic crisis of potentially doubled digit unemployment and a “generation” of lost earnings.

“For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied,” he says in excerpts released by his transition office. “And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.”

[snip]

In his speech, Obama confronts the critics of his plan directly, acknowledging both the staggering cost of his proposals and the impact it will have down the road, by imposing enormous debt on future generations. To assuage those concerns, Obama pledges “an unprecedented effort to eliminate unwise and unnecessary spending.”

And he concedes what skeptics have already said: that the government has already spent a lot of money to turn around the economy with little apparent result.

“We haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy,” he says in the speech.

“That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems — we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.”

[snip]

“I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible,” he says. “If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four.

“We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.”

I agree with Obama.  The need is urgent; we needed this stimulus before the holidays.  People are hurting and more and more jobs are being lost.  If we had not been in a transition period with the sitting president the lamest of lame ducks and Congress nearly as lame, we might have had a package.

My worry is that $800 billion may not be enough, especially if almost half ($300 billion) comes in the form of tax cuts that include reductions in payroll taxes.  What good do those do people who aren’t working?  That leaves $500 billion for infrastructure investment, unemployment benefit extensions and other programs.  I know that $500 billion is a lot of money.  But is it enough for these economic times?

It seems to me that Obama is trying too much to placate the Republicans in this.  Obama has a mandate to jumpstart the economy.  He has an overwhelmingly Democratic Congress.  Yes, Obama campaigned on a message of change, a message of inclusion and bridge-building.  He’s given the Republicans a way into this; he’s offered them a compromise.  If they don’t take it, Obama needs to move ahead anyway.  The country needs this more than we need its leaders in Washington to play nicely with one another.  It’s too important to play politics with it.

Some in Congress had hoped to pass a stimulus bill in time for President Obama to sign it on January 20, right after he is inaugurated.  That’s not going to happen.  It will be a real achievement if it’s done before President’s Day, in my opinion.  Is that soon enough?