Obama's Next Economic Plan: Don't Use the S Word!

[The Northerner]

With the economic recovery sputtering and the midterm elections approaching, President Obama is considering additional tax credits and tax breaks, additional spending on clean energy and infrastructure — in other words, additional stimulus. But don't call it stimulus! In a recent Politico story about Obama's plans for "emergency fixes to stimulate the economy," the White House press office refused to comment on the scope "other than to say it won't be a 'second stimulus.'"

It's a strange situation. The White House believes the American Recovery and Reinvestment Act of 2009 helped avoid a depression and end a recession, saving or creating about 3 million jobs so far. And most nonpartisan economists basically agree: the $787 billion package of tax cuts, state aid and spending projects helped stimulate economic activity in the short term, which is the whole point of fiscal stimulus. As I wrote in the magazine last week, the Recovery Act is also funding a range of innovative education, health care, transportation and energy policies that will transform the country in the long term.

Nevertheless, the stimulus has become a national punch line. Even Obama quipped on Thanksgiving that his annual pardon had saved or created four turkeys.

The unpopularity of the stimulus is no great mystery. The Administration marketed it as a jobs bill, the only way to prevent rampant unemployment. But rampant unemployment happened anyway. The White House says things would be even worse without the stimulus; the economy was hemorrhaging about 700,000 jobs a month before its shot of fiscal adrenaline, and it's slowly adding jobs now. That's true enough, but "not as awful as it would have been" is not the kind of catchphrase you can build a movement around. Most economists accept the counterintuitive Keynesian idea that government needs to loosen its belt when families and businesses are tightening theirs, but it's awful politics.

"It's hard to sell," says Jared Bernstein, chief economist for Vice President Joe Biden. "If you could show people the world without the Recovery Act, it would be a lot more popular."

Read more: http://www.time.com/time/nation/article/0,8599,2016194,00.html