I think we're in agreement about the core issue- that bunding everything into this bill is a problem. Even the infrastructure stuff IMO should be handled separately (quickly, but separately) because I've always felt that we need more centralized planning on the federal spending for roads and infrastructure and with a big increase in those expenditures it's surely a time for that to happen rather than allowing the usual where the most powerful incumbents get to throw more money to their states' projects, and to projects that often amount to political favors instead of those that have been properly vetted and prioritized. There's just no way that any of that is really going to happen with this kind of emergency bill.

If the political environment ever let tax cuts expire without having it be a major political battle, then I could maybe see how the Democratic plan is worse in terms of long term structural deficit. However, considering that never happens — and the likelihood of keeping those tax cuts around for as long as the long term spending is billed for (I mean it's only talking about 3-4 years) — then a tax cut is quantitatively worse when looking at the government's balance sheet. That said, it would help private balance sheets start to pay back their debt, and even though that wouldn't help in a “recovery” it could at least go a long way into helping people that don't lose their jobs be in a better position. I'm definitely not opposed to tax cuts per se, but just believe they have even less chance of turning things around over the short term.

I agree with you it's a problem that they are putting all this long term spending into an “emergency” bill. The emergency should be to extended unemployment benefits, give grants to the states to help cover their unemployment and some construction projects, and look into figuring out how to deal with housing issues.

The longer term vision he has should be in a separate bill and debated over the next couple of months. I believe on that they should look at spending $2 trillion over the next 5 years on infrastructural programs, and should have close to revenue neutral tax cuts (let the Bush tax cuts expire and cut on the bottom two tiers similar to what the Republicans are opposing…I'd also look at having a progressive income tax for investment income). I'd also cut about $500 billion out of government programs.

I agree that infrastructure spending is useful but will have nothing to do with a recovery, because, as you imply, the ramp up period is too long.

As Krugman points out, the CBO is reporting that the recession will last well into 2011 when we'll have 8% unemployment. Keep in mind that things are still getting worse and will continue to for quite some time. That means that even long term projects (ones that might not even start till 2011) are worth putting on the plate, because they'll be needed then.

We have to be smart and think long term about how to solve this economic crisis. There isn't much use in returning to the bubble economy of the last 20 years. One way out is to actually facilitate business through better infrastructure. You and I are more productive if our roads are better and our internet is faster. Our businesses are more efficient if they spend less on energy because of a better electricity grid. And that's just the tip of the iceberg.

The recovery will actually and only come from the private sector and the best hope for immediacy is for private equity to turn on their spigots once again.

While I see you favor liberal sources for quotation, nonetheless, it would be interesting to see if you can find untruths in this non-left analysis……..http://www.heritage.org/research/economy/wm1776.cfm

And second, there's the inertia of bureaucracy so that a program created or expanded today will be with us for a long time- so instead of accepting these absurd deficits in the short term we're also allowing the budget to be seriously out of whack ad infinitum.

Now, I'm not commenting on how accurate these GOP accusations are because I haven't read the bill- but I think those are very legitimate concerns that should be addressed if they do apply.

Mikkel, it seems to me that you're complaint is basically that the reality of our political system doesn't permit anyone to argue for or against anything on actual merit, but instead it all has to be sold in a disingenuous manner. So, you have Dems claiming a multiplier effect for federal spending- for which there isn't nearly the evidence that they want to have us believe- and the GOP resting on conservative belief that tax cuts don't cause a net reduction in revenue (so that they can ignore that the tax cuts are increasing the deficit just as the spending is.) I'd say at least on the GOP side though that to whatever degree their assumption is wrong then at least the potential negative effect isn't as great- because transferring $1 through tax cuts can't really be less than a 1:1 ratio (I don't think?) whereas some people are showing that instead of a positive multiplier, the transfer through spending can actually be less than 1:1. So it seems to me that perhaps neither approach has any chance of succeeding but the current Dem approach could potentially make things worse.

I can't say at all that I have a great understanding of the economic principles that are being argued, but that's my cursory interpretation and gut feeling- tell me if you think I'm completely off base.

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If they pass the bill, the economy still goes down the tubes and the Republicans can successfully create the perception that it was because the government is incompetent…then the long term plans are at risk — and that's much more likely with pork in there.

I just watched the Boehner interview and he sounded very wise and moderate, even though his proposal was complete crap. He also wove in the stupid parts of the Democratic pork in with unemployment insurance and state assistance — things that are critical and widely hailed by all economists no matter how conservative. They are setting up the Dems for failure by treating everything as “Government” and Congressional Democrats are so stupid to follow it…just like the TARP. There were awful provisions in there that were totally WTF grab bags of the worst sort.

I think Obama should come out publicly and yell at the Democratic leadership and distance himself away from some of their idiotic pet projects. He should threaten to veto anything that has too much and force them to actually have a bill that focuses on long term infrastructure, with short term help that everyone can agree with.

When it comes to “alleviating” the downturn, I agree with you wholeheartedly. It will help hundreds of thousands if not a couple of million people (even though unemployment will still continue to skyrocket), and as long as Obama makes it clear that the main focus is on optimal long term investment with helping those people as a bonus, then I believe it will be a success. Over the 5-10 year period (and especially beyond) I think we would have enormous positive impact and tens of millions of high income jobs that wouldn't exist otherwise, but all the rhetoric has already been built to concentrate on whether the unemployment rate is higher in a year or two than right now…and there is a very good chance of that.

The same goes for installing insulation and solar on all federal buildings. Local work, local jobs and work that is needed. Ditto lighting up all the dark fiber optic cables with expanded and cheaper broadband that will help our service economy compete with the countries that “got it” years ago — like Korea and India. Better, faster connectivity is the key to providing global services.

If the Republicans make it seem as though there are only two choices for economic recovery, tax cuts or investment in infrastructure (or some other Dem plan) then people will support what they know, which is tax cuts…. and believe that the Dems' plan won't work.

Remember the Republicans' back-up for president if McCain fell ill was Sarah Palin who, while being sexy and perky, can barely put two sentences together.