Hindsight is 20/20: Stimulus edition.
I am constantly reminded of how poor the “Stimulus” was – but this will not be another entry into the debate of political will vs. reality. I’m not going to argue whether or not an inadequate stimulus was proposed because of political constraints – IE, it had to be kept under X billion to have a chance of passing, regardless of the required size to ensure full employment.
The point that I see no one making is that the design of the stimulus was poor. It shouldn’t have been absolute – it should have been conditional. Instead of saying “we will spend X billion on Y project” – it should have said “we will spend X billion on Y program UNTIL Z condition is met” – with the condition being NAIRU, etc. Considering how awful the CBO is at predicting recessions and their recoveries, they would have scored it low – and we would have ended up with more stimulus when the recession was deeper than they predicted – leading to a faster recovery.
This was an unforced error. Hopefully the democrats have learned from it. I suspect not.
Also, to top it off, they could have put conditional taxes on the back end to pay off the stimulus debt – which would have helped with the score. You could have literally had a CBO score of near $0 over 10 years if the stimulus bill had been written correctly. Just like ObamaCare was written to be near $0. Call it the Responsible Recovery Act.
Instead we got the Half Stimulus Act. And no recovery.