Keeping in mind that a lot of the money hasn't been spent yet, we can say one thing the stimulus is doing: closing state budget deficits. The Center for Budget and Policy Priorities says that the $140 billion or so dedicated to state spending "is enough to close, on average, roughly 30-40 percent of state budget shortfalls." You want a graph?
You can't handle a graph.
Okay, maybe you can:
As Matthew Yglesias writes, this sort of thing is important. "Certainly conservatives don’t seem like the kind of folks who’d deny that steep tax hikes amidst a recession will make things [worse]. But tax hikes are, obviously, one way to plug a hole in state budgets. And sharp state spending cuts have the same pro-cyclical impact." Beyond that, state services are important in a countercyclical sense: Many more children need health-care coverage when adult unemployment hits double digits. If states have to pull back on S-CHIP as the recession worsens, it's real trouble.
It's also worth saying that this money will help preserve a lot of jobs at the state level. This was an element of the plan that never got enough attention for my tastes: Preserving jobs is really important. More important, arguably, than creating new ones. First, it's cheaper to preserve a job than to create one. Second, it's more effective. The evidence we have suggests that a worker who is laid off from one job frequently finds that his or her next position is at a lower wage, with less responsibility. And the worker is frequently not as productive, at least for a while, because the learning curve at a new position can be steep.
Now, the full stimulus was almost $800 billion, and this is only $140 billion. You can't judge the effectiveness of the whole simply from this part. But this is a key part. And if we're looking to do a second stimulus, a significant infusion of aid to the states would be a good place to start. It would be good policy right now to basically erase state budget shortfalls, and even allow states to increase the service spending, given that it's more necessary than ever.
SusanG (DK): Obama: The economy's "back from the brink." Really.
After a week of international traveling and summits, President Obama took to the airwaves in his weekly address this morning to tout the economic recovery.
In a little over one hundred days, this Recovery Act has worked as intended. It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession. It has delivered $43 billion in tax relief to American working families and businesses. Without the help the Recovery Act has provided to struggling states, its estimated that state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs – layoffs that would affect police officers, teachers, and firefighters.
Claiming that the Recovery Act was designed not work in four months, but over a period of two years, the President took direct aim at critics from both the right and the left:
Now, I realize that when we passed this Recovery Act, there were those who felt that doing nothing was somehow an answer. Today, some of those same critics are already judging the effort a failure although they have yet to offer a plausible alternative. Others believed that the recovery plan should have been even larger, and are already calling for a second recovery plan.
Returning to his recurrent theme of building a "new foundation," Obama pointed to the need to have a serious revamping of the economy as we move ahead, and he lauded moves toward creating new jobs in the energy sector and emphasizing funding in education. Most importantly (and relevantly, for this past week) is the need for reforming health care--and most significantly for tea leaf readers, he insisted on pushing the public option:
One such choice would be a public option that would make health care more affordable through competition that keeps the insurance companies honest.
He finished off with his usual stirring rhetoric, taking a look at our past, tying it to the realities of the present and pointing to the challenges of the future:
I said when I took office that it would take many months to move our economy from recession to recovery and ultimately to prosperity. We are not there yet, and I continue to believe that even one American out of work is one too many. But we are moving in the right direction. We are cleaning up the wreckage of this storm. And we are laying a firmer, stronger foundation so that we may better weather whatever future storms may come. This year has been and will continue to be a year of rescuing our economy from disaster.
But just as important will be the work of rebuilding a long term engine for economic growth. It won’t be easy, and there will continue to be those who argue that we have to put off hard decisions that we have already deferred for far too long. But earlier generations of Americans didn’t build this great country by fearing the future and shrinking our dreams.
The full address can be found ... on the White House website.
Benen: A SURTAX WOULD GET THE JOB DONE...
How are Dems going to pay for health care? Here's a thought.
House Democrats agreed yesterday to raise taxes on the wealthy to pay for a sweeping expansion of the nation's health-care system, proposing a surtax on the highest earners that could send the top federal tax rate toward 45 percent.
Beginning in 2011, the plan would target all income over $350,000 a year for families and $280,000 a year for individuals, Democratic sources said. The surtax would start at 1 percent, rise to around 1.5 percent for families earning more than $500,000, then step up again, to around 3 percent, for families earning more than $1 million, Democrats said.
That would raise about $550 billion over the next decade, Democrats said -- about half the cost of reforms that are expected to cost about $1 trillion.
Middle-class taxes would be unaffected. And while the wealthiest earners would see an increase, Rep. Allyson Y. Schwartz (D-Pa.) emphasized that the resulting policy would be in a position to significantly lower the insurance premiums the rich are currently paying.
Rep. Charlie Rangel (D-N.Y.), chairman of the House Ways and Means Committee, described the surtax as the "best way" to raise money for the reform package. The NYT added that the proposal signaled "a broader unwillingness by Ms. Pelosi and her caucus to compromise on what they see as crucially needed improvements to the system, including the creation of a government-run insurance plan that would compete against private insurers."
What's more, the decision to pursue the surtax as a funding solution will allow the House Democratic leadership to move forward with their plan to unveil a completed bill as early as Monday. Stay tuned.
- Atrios adds
Soak The Rich
With this small tax bump for the relatively wealthy being proposed, look forward to the following bad press coverage:
Confusion between total and marginal tax rates.
Confusion between small business revenue and small business profits.
Stories about how in some places $350,000 isn't all that wealth.
John (at Eschaton): Blast From The Past
I found this NYT article from the 2000 campaign last year when I was looking for information about McCain's at the time non-existent energy policy, and I like to revist it from time to time.
Gov. George W. Bush outlined a wide-ranging energy plan today that called for more domestic fuel production, better relations with foreign oil suppliers and opening the Arctic National Wildlife Refuge for drilling, all of which he framed as potential remedies for rising oil and gas prices.I think of it every time that brilliant policy wonk Newt Gingrich chants about drilling. It's just one of many policy areas where the Republican party refuses to engage on any substantive level.
Mr. Bush said the plan, which also included incentives for developing alternative energy sources and clean-burning fuels, reflected his determination to limit the country's vulnerability to the international oil market and to avert escalating prices and energy shortages.
[...]
"They have had seven and a half years to develop a sound energy policy," Mr. Bush said. "They have had every chance to avoid the situation that confronts us today. And now they have nothing but excuses, bad ideas and -- as the clock runs out -- one last ploy."
Dougj: Palin comparison
One of the things I understand least about the media’s reaction to Sarah Palin is the need to see her as a symbol of something. Here’s Douthat (from a recent, much-maligned column):
If Palin were exactly what her critics believe she is — the distillation of every right-wing pathology, from anti-intellectualism to apocalyptic Christianity — then she wouldn’t be a terribly interesting figure.I’m as anti-Sarah Palin as anyone this side of Andrew Sullivan, but it would never occur to me to see her as the distillation of anything in particular. I believe—and I think the record shows—that she is a vindictive, power-hungry idiot. So maybe she’s the distillation of vindictive power-hungry idiocy. But that’s it.
I think this is wrong too (from Judith Warner):
The idea that women with a “major education” think they’re better than everyone else, have a great sense of entitlement, feel they deserve special treatment, and are too out of touch with the lives of “normal” women to have a legitimate point of view, is a 21st-century version of the long-held belief that education makes women uppity and leads them to forget their rightful place. It’s precisely the kind of thinking that has fueled Sarah Palin’s unlikely — and continued — ability to pass herself off as the consummately “real” American woman. (And it is what has made it possible for her supporters to discredit other women’s criticism of her as elitist cat fighting.)
[....]
This is why Palin — in her down-home aw-shucks posturing — is the 21st-century face of the backlash against women’s progress.
Palin certainly has the “I don’t need no book learnin’ shtick” down, but it’s hard for me to see how the shtick has been aimed particularly at women. She spent a lot of time attacking Obama as elitist, but there was also the idea that she was some kind of counterpart to Hillary Clinton (who has just as elite an eduction as Obama) and that she would appeal to voters who thought that sexism had deprived Hillary Clinton of a shot at the presidency. How does that make her the “face of backlash against women’s progress”?
In the end, all the discussion of Palin’s role in the gender wars or culture wars or whatever it is that we’re supposedly fighting is just a distraction from the simple truth that she is woefully ill-prepared for national office. It really is that simple.
DemfromCT (DK): Your Abbreviated Pundit Round-up
Saturday slumming... with the pundits.
In the 2008 election, we took sides, straight and simple, particularly with regard to the vice presidential race. I don't know that we played a decisive role in that campaign, and I'm not saying the better side lost. What I am saying is that we simply didn't hold Joe Biden to the same standard as Sarah Palin, and for me, the real loser in this sordid tale is my chosen profession.
Carl, the standard is: are you qualified? The rest is detail. Where the media fell down is in not keeping that front and center at all times, and building her up where she never should have been. CNN exit poll:
The reason the Republicans lost so many Senate seats last November is now becoming clear. No one had any time to think about the campaign. They were too busy worrying about Senator John Ensign’s sex life.
I am not an economist. Still, I am confident in saying that, just as it was absurd to talk about an Obama bear market in March, it's much too soon to be condemning the stimulus package.
The crisis staring America in its face and threatening to bring it to its knees is unemployment. Joblessness. Why it is taking so long — seemingly forever — for our government officials to recognize the scope of this crisis and confront it directly is beyond me.
Unfortunately, V-shapers are looking back at the wrong recessions. Focus on those that started with the bursting of a giant speculative bubble and you see slow recoveries. The reason is asset values at bottom are so low that investor confidence returns only gradually.
That's where the more sober U-shapers come in. They predict a more gradual recovery, as investors slowly tiptoe back into the market.
Personally, I don't buy into either camp. In a recession this deep, recovery doesn't depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery, V or U shaped.
Coming after the recent Beltway debate over coordination between Huffington Post’s senior news editor, Nico Pitney, and the White House over a question about Iran at a recent presidential news conference as well as President Obama’s decision to call on another Huffington Post reporter at his first White House press conference, the choice of Froomkin to oversee reporters as Washington bureau chief seemed to solidify the site’s identity as a progressive voice heavily invested in Obama’s success.
But is it really?
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