The Republicans are clearly pleased by this, as it potentially helps them unseat Obama in 2012, and I suspect for many of them this was their plan right along - force a smaller stimulus, force a smaller recovery, leave the economy in worse shape for the next election. Of course, a still anemic economy may also unseat the GOP's House majority. From the NYT:
[The White House's] economic team is mainly focused on negotiations to raise the debt limit, presumably parrying Republican demands for deep spending cuts that could weaken the economy further while still reaching an agreement on the necessary increase.We needed a larger stimulus. A lot of us knew it at the time, and the WH, while they claim it's all they could get, they have no idea because they didn't try/fight for more. The President was at 70% in the polls, the country was panicked about the economy. Obama could have gone to the nation and sold the package he should have known was needed. I raise this again because these errors are not being made in a vacuum - they're the kind of policy/political decisions that are being made time and again by the White House. And unless they learn from their past mistakes - unless they recognize them AS mistakes - they're going to continue erring in the future.
The grim numbers tell an unavoidable truth: The economy is not growing nearly fast enough to dent unemployment. Unfortunately, no one in Washington is pushing policies to promote stronger growth now.
The sinkholes in the economy should be obvious. Most prominently, the housing market is still awful, and state and local government budgets are still a mess. Conditions apparently have to get worse before deficit-obsessed policy makers will be ready to address them, including with bolstered foreclosure relief and more fiscal aid to states. More delay would only imperil the recovery, such as it is. And without a strong recovery, it will be even harder to repair the budget. Continued hard times means low tax revenues and high safety-net spending.
