Friday, June 25, 2010

An end to fiscal stimulus?

One can hope. Could the concept of big bailout packages be coming to an end? Maybe, but will it. Sure, it is a situation where the public's willingness to accept deficits now to ease the blow is being tempered by the fear of being unable to pay the bill later or passing the bill on to later generations. But part of the problem is politics itself.
It's partly Obama's own fault. He hasn't convinced Americans that last year's giant stimulus actually created many jobs. Nonpartisan economists say the stimulus saved or created at least 1.2 million jobs and probably more, but many voters don't believe all that spending had any effect at all.

That's partly because so much of the stimulus was invisible, in the form of tax cuts and aid to states. But it's also because our wonky president, for all his policy-designing brilliance, tends to neglect the mundane blocking and tackling of politics. Sure, Obama has talked a blue streak about the importance of the stimulus — but when was the last time you saw him in a hard hat, talking with a construction worker who got a job thanks to the plan?
I was always skeptical of big bailouts, but it true that the Obama Administration has failed to politically sell the need. Add to that the favoritism that the bailouts have shown, particularly toward public sector labor unions, and the average American is no longer on board, even if they are in a state that is struggling.

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