The Stimulus and the Damage Done

The handling of the so-called "stimulus" package has been a debacle since day one.  Instead of a thoughtful debate about a spending package that might have positive effects on the economy (I'll play along with the idea that this is possible, for the moment), Pelosi drew up an unholy mishmash of a Democratic wish list with a number of blatant payoffs to Democratic support groups.  I wouldn't expect much more from Pelosi, who is quite possibly the worst Speaker of the House in modern political history.  What was shocking was the passive approach taken by Obama to this disaster of a bill.  At a time when I would have expected candidate Obama to say, "Let's take the time to do something thoughtful and intelligent," he switched gears completely and became Doomsayer-in-Chief to support a bill he took almost no role in crafting.  The man who promised voters in the debates that all of his new spending plans would not increase the deficit, who promised voters that he would scrub each new spending bill "line by line" to make sure it had no waste, is about to run the largest government deficit since World War II and he has been in office less than a month.  On top of that, he scared our largest trading partners by allowing a "Buy American" provision in the early drafts of the bill that sparked serious warnings of a disastrous trade war.  Perhaps Obama should familiarize himself with the Smoot-Hawley Tarriff for some historical context.

Obama was supposed to be the anti-Bush.  He was supposed to be intellectual, dispassionate and reflective.  I would have expected that Obama to have slowed down Pelosi and her crazy bill, perhaps splitting it into a smaller, directed short-term stimulus package that was more defensible as real stimulus and a larger appropriations bill that would be passed through the normal legislative route.  If he had taken control and done that, he would have scored a major political coup.  I think he missed a potential for a defining moment in his Presidency.  What he offered up instead was a feckless performance, some disgraceful scare-mongering worthy of Bush and a lot of silly straw man arguments.

Republicans were not arguing that tax cuts solve everything and it was disappointing to see Obama lie about this in making his case.  What most were arguing was that this spending package is too large and involves too many items that are unlikely to be spent in any time to have an effect on the current recession.  Why not create a smaller emergency spending bill as a stimulus and then move some of the other proposals, such as infrastructure repair, through the normal appropriations process?  There is no question that the Republicans tarnished their ability to argue against spending during the early Bush years, but that doesn't mean that it is now a good idea to spend the government into virtual bankruptcy.

Obama still enjoys high approval ratings that will likely last for a while longer.  He burned a little of his political capital supporting this bill, but he has a lot to spare and he won't be hurt by this misstep until the effects of this insane debt festival start coming due.  And they will come due.  At some point, the only way to get out of this debt mess will be to inflate our way out and that is going to be an incredibly ugly sight.

Congressional Democrats, on the other hand, have hurt themselves badly.  In the Rasmussen generic congressional poll, where Democrats have been beating the Republicans like rented mules for years now, Republicans trail Democrats by only one point.  It's still a long way from the midterm elections, but there are some other signs that the Democrats are setting themselves up for an epic fail at the Congressional level.  Chris Dodd's once-safe Senate seat, for example, is starting to look decidedly shaky over his stonewalling on his sweet mortgage deal with Countrywide.  But above all, Pelosi and Reid have handed the Republicans an enormous stick with which to beat them.

Bush is no longer the President.  The Democrats cannot blame him for everything anymore, especially given that they have controlled Congress since 2006.  And it astounds me to hear defenses of the stimulus on the basis that Bush was so terrible.  I wasn't aware that the answer to an 8 year spree of spending beyond our means and loading ourselves with debt was to spend even more beyond our means and load ourselves with even more debt.