Needless to say, I was completely unimpressed with the Obama speech. It is $80B in real stimulus, hundreds of billions in tax cuts that will bypass the poor and barely help the lower middle class, and lots of tax subsidies for business (aka actual socialism, as opposed to what the Tea Party imagines socialism to be). All funded by draining the Social Security Trust Fund and, it is generally predicted, cuts to Medicare and Medicaid.
If Bush had proposed this, it would have been called mean-spirited, short on vision, and many dollars short and days late.
That’s my take.
Via Digby, this is what happens if you complain about the theft of Social Security and Medicare too loudly:
Added: Kash and Mark Thoma like the plan more than I do.
Added: Strangely, Brad DeLong apparently refused to approve the comment that I left at his blog, which was substantively the same as the one I left with Kash.
DeLong is, in my experience, an odd person. In the past, he crudely edited and suppressed posts of mine, which is why I make the attempt only when I think the issue is very important. Although this tendency afflicts the right to a degree that it discredits the movement, people of all political persuasions nowadays seem to want to enforce ideological conformity. I’m sorry to see it afflict him. Teachers in particular have to demonstrate a tolerance for differences of opinion, lest they discredit the profession.
Substantively, one danger in the Obama plan is that people will imagine that it will get the economy back on track. Realistically, it is too small to do that. It may prevent an outright recession, but at the cost of weakening Social Security. Roughly 2/3 of the payroll tax cut will not go toward consumption. It will go toward businesses or toward people who have a greater propensity to save than to spend. Preferences for veterans are nice for veterans, but have no net effect on the economy. The rest of the plan will be stimulative… but only if the Republicans do not extract concessions.
If they cut Medicare and Medicaid– as the President all but invited them to do– the net stimulus will be even smaller. At the very most, it amounts to 2% of GDP probably spread over two years vs. a predicted GDP somewhere in the 1-2% range. By contrast, in a real recovery, GDP growth would be something like 5%. The Obama plan is about $800B short.
This is what is too rude or stupid to appear on the pages of Professor DeLong’s website.