President Obama and his ideological peers already have their excuses ready for when the economic stimulus package doesn’t work.
Even while calling for the urgent passage of the $800 billion-plus economic stimulus package, the Obama administration and its liberal allies are laying the groundwork to neutralize criticisms should it fail.
“[B]y the midterm elections we’re probably not going to see an economy that’s better than now,” former Clinton Labor Secretary Robert Reich conceded Sunday on ABC’s “This Week” with George Stephanopoulos. “I mean, not that the stimulus program will have failed, but that the stimulus program, even if it succeeds, will not actually kick in. It will not get the economy better than it is now. Without the stimulus, the economy could be far worse in two years than it is now.”
While he hasn’t been quite as explicit as Reich, President Obama has adopted the same line of reasoning as part of his public relations offensive to boost support for the stimulus package: a failure to act will make things worse, even if acting may not make things better — or at least not for a while.
President Obama is selling the plan as one that will “save or create” four million jobs, and he’s continued to hedge his statements on the upside potential of the legislation while portraying the dire consequences of inaction.
Last week, he wrote in a Washington Post op-ed that if Congress didn’t pass the stimulus package: “Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.”
On Monday, President Obama took his show on the road, urging an Elkhart, Indiana audience to get behind his plan, while cautioning them not to expect miracles.
“We know that even with this plan, the road ahead won’t be easy,” Obama said in his initial remarks at the town hall-style gathering. “This crisis has been a long time in the making, and we know that we cannot turn it around overnight. Recovery will likely be measured in years, not weeks or months.”
Then, in his first primetime press conference as president Monday night, Obama explained: “My administration inherited a deficit of over one trillion dollars. But because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss in confidence.”
What this means is that if the economy is still in trouble as the 2010 elections approach, Democrats will argue that eight years of Republican rule left the country in such awful shape that Democrats will need more time to clean up the mess. If unemployment is in the 7 percent to 9 percent range, they’ll say, without their policies, it would have been 12 percent, or perhaps higher.
While lawmakers are primarily interested in getting reelected, to liberal intellectuals who are constantly clamoring for more government spending, the failure of the stimulus package would represent another real-life example of the failure of Keynesian theory. That’s why they’ve been criticizing the plan from the left.
New York Times columnist Paul Krugman has led the way by arguing that the stimulus package is far too small.
“[I]f we look at the scale of the problem, the Congressional Budget Office says that we’re gonna have a hole in the economy, insufficient spending to the tune of $2.9 trillion over the next three years,” Krugman said on ABC’s “World News” this Sunday. “And we’ve got a sort of $800 billion plan to cope with it. It’s actually quite a bit on the low side.”
Krugman has complained that the “sort of” $800 billion legislation has too many tax cuts, and that President Obama made too many concessions in an effort to win support of Republicans.
“You know, he did a tremendous amount of attempt at outreach and got zero for it,” Krugman lamented. “Absolutely nothing. And I hope he’s learned his lesson from that.”
In his Monday column, Krugman tore into the compromise legislation forged by centrists in the Senate. “I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy,” Krugman snarled.
So for Krugman and other liberal ideologues, if the economy does not recover after an $800 billion government stimulus package, the excuse will be that Obama abandoned pure Keynesianism out of a misguided desire for bipartisanship.
But unlike Krugman, Democrats will have to face voters in the fall of next year, and if economic conditions do not improve, they’ll be forced to explain how they ran up trillions in debt without having anything to show for it.