Wednesday, September 7, 2011

Hey, I Don't Want To Brag, But...

The other day, when I wrote this:
Let's annualize that [U.S. economic output] gap, and say that, over the seven years the CBO optimistically expects this thing to last, that the target for one year's spending should be $700 billion or so. Does anyone reading this think that he will propose even half that ridiculously low sum for the next fiscal year? Not a chance.

Profiles In Fierce Advocacy: Sometimes, It's Really Frustrating
I figured it would be at least until The Greatest Speech On Jobs Evah before I knew for sure that prediction would hold. Never underestimate the tendency of a modern presidential administration to leak even the most pathetic details of a plan:
President Barack Obama plans to propose sparking job growth by injecting more than $300 billion into the economy next year, mostly through tax cuts, infrastructure spending and direct aid to state and local governments.

Obama will call on Congress to offset the cost of the short-term jobs measures by raising tax revenue in later years. This would be part of a long-term deficit reduction package, including spending and entitlement cuts as well as revenue increases, that he will present next week to the congressional panel charged with finding ways to reduce the nation’s debt.

Obama Said to Seek $300 Billion Jobs Package
Yep, not even half. No, it doesn't count that it was close. I wrote at the time that the $700 billion was way smaller than what they should really have been trying for, and it looks like about a third of that $300 billion is going to be useless tax breaks. They don't count.

If they had been serious about getting the economy kick-started, they would have proposed at least $2 trillion - the amount of the output gap to date, minus the $800 billion of the stimulus bill. They're off by almost an order of magnitude.

"Go big or go home" definitely isn't their motto.

UPDATE: Well, it's not their motto when it comes to helping ordinary Americans. Ezra Klein reports:
The bulk of what will be in President Obama’s jobs speech Thursday will not be new stimulus. The big-ticket items will be a slightly expanded version of the payroll tax cut and an extension of unemployment insurance. Together, these two pieces cost about $200 billion a year, which accounts for most of the $300-$400 billion in jobs spending that the White House is set to announce. But since they are already in effect, extending them will not, from an economic point of view, add much new demand into the economy. It will simply prevent demand from being sucked out. The rest of the proposal is likely to be an infrastructure plan — I would expect the price tag here to be in the $50-$100 billion range for 2012 — and more state and local aid. There will also be a call for Fannie and Freddie to extend refinancing help to more underwater homeowners.

The White House’s two priorities
So, maybe not even as much as the $200 billion in stimulus I was thinking was the plan. Figures. It gets even better, though:
Getting less attention in the media is the follow-up speech the White House is planning, which will lay out a specific deficit-reduction agenda that not only meets the $1.5 trillion goal of the “supercommittee,” but exceeds it and pays for the new jobs spending. These proposals will look quite similar to the grand bargain the White House offered Speaker John Boehner, and liberal groups are grimly preparing for the administration to call for raising the Medicare eligibility age.

The White House’s two priorities
[italic emphasis added]

That one just never gets old, does it? One of these days, we're clearly going to have to give up Medicare, Medicaid, and Social Security so that President Fierce Advocate can look good for the people who matter.

In case you're wondering, the people who matter probably aren't anyone you or I know.

(h/t Lambert @ Corrente)

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