Why the stimulus

A “sensitive and confidential” briefing document written by Larry Summers, head of President Obama’s economic team, in 2008 and leaked to the New Yorker recently, confirms what the president’s critics have said all along. The purpose of the Obama stimulus plan was to implement Obama’s domestic agenda, and it was known to be dangerously over-large:

The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary. . .

It is important to recognize that we can only generate about $225 billion of actual spending on priority investments over next two years, and this is after making what some might argue are optimistic assumptions about the scale of investments in areas like Health IT that are feasible over this period. . .

Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run. . .

The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.

(Via Instapundit.)


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