Chait says it well about calls for a new stimulus

[Recursion]

http://www.tnr.com/blog/jonathan-chait/93245/should-obama-demand-big-new-stimulus-eh

(emphasis mine)

I completely agree with the economic case on the need for greater stimulus. I sort-of agree with the political argument that President Obama blew it by not passing a larger stimulus then the one he did. (If he proposed, say, a $2 trillion stimulus, maybe the moderates would have considered the moderate thing to do knocking it down to $1.5 trillion. On the other hand, maybe they would recoiled and have killed it altogether.)

The part of the argument that I don't agree with is the notion that Obama should be demanding new stimulus now, or should have been demanding it for the last year. Paul Krugman's column today encapsulates what I find unconvincing.

...

So now we're not really arguing about what to do about the economy. We're arguing about political messaging. But it's pretty clear that the concept of economic stimulus is unpopular. People think it's a big waste of money. So what is the value of devoting a lot of presidential energy to an unpopular message? There's no real evidence that sustained presidential rhetoric can change people's minds on issues where they've formed an opinion.

...

A large new stimulus is also symbolic, since it has no chance of passing. Even a small stimulus probably won't pass, but it's imaginable. Even if you assume that bite-sized measures have zero chance, that means you're just choosing between different symbolic measures. What's the point of advocating for an unpopular symbolic measure instead of a popular one?

Lamentable as the fact is, the public does not like the stimulus and does not want more of it. All the more so, Congress will not pass one. Like Chait, I fail to see the benefit to be derived from advocating an unpopular policy that will not pass. Probably because, also like Chait, I don't think the President's thoughts on an issue particularly sway decided public opinion about it.

It is severely bad luck that the BLS numbers the stimulus was based on drastically underestimated the systemic rather than cyclical unemployment (then again it's less clear what help fiscal stimulus offers to systemic unemployment -- it's a textbook countercyclical and non-systemic tool). But wishing our luck were better isn't a policy.

[TwilightGardener]

1. I agree with this. It's not in the cards, and I'm pretty sure the administration

has known that for a while. I think Obama's taking the best approach, in breaking down a stimulus into small TARGETED parts that sound more palatable to the public.