The CBO estimated a 1.5 trillion dollar hole opening up in GDP.
Obama knew it. Everyone in Congress knew it. Some economists might have heard that as well, but only a few like Krugman NOTICED it and drew the obvious conclusion. You can only hope to stop a deflationary spiral if the hole in GDP gets filled. Otherwise the destruction of credit continues.
A 800 billion dollar stimulus, half of which was composed of ineffective taxcuts was no rational response to THE FACTS presented to those in power. They chose very poorly to lowball everything. (Compromise! Moderation! Politeness!) And now we are supposed to listen to pathetic mewling excuses: oh but nobody coulda known then! Nobody had those numbers! (which, as already noted, is a BALD FACED LIE) Oh who coulda foreseen??? Who?
They were warned well in advance that there would be NO second bite at the apple. Krugman warned them. A bridge that is only half built across a gorge is no more useful than no bridge at all, he said. It won't work -and you won't get a second chance to make another installment if the first effort doesn't work. The failure of the first shot -which is mathematically guaranteed - will be used to prevent follow up efforts. I knew it too, and I'm no Nobel laureate economist. But of course that is a political not a strictly economic calculation. But if I can see that and Paul Krugman can see that, what explains the failure of the White House and the Hill Democrats to see it too?
Certain people whom we have elected are supposed to be adept at leadership and politically wise. We placed all our trust in them - as we had no other choice but to do. They have proved themselves to be at best FOOLS, or else -and this is way more likely- they are nothing more than cynical ideological weathervanes who go full-on Reagan-Thatcher when traditional Democratic policy preferences run into the SLIGHTEST resistance from big money donors.
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