Krugman: Senate Stimulus Compromise Cuts Most Needed Parts Of Plan

I'm still working on the numbers, but I've gotten a fair number of requests for comment on the Senate version of the stimulus.

The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.

Read the whole story here.

Comments

[RoloTomassi]

Watching "This Week" yesterday I was struck by the ideological 800-lb gorilla in the room as the round table discussion attempted a dissection of Obama's bi-partisan efforts and the results--it was quite surreal.

There is NO MYSTERY HERE on why no bi-partisan agreement was achieved; two parties, to very different approaches to economic theory. The GOPers want to keep on keepin' on with the Free market fundie nonsense, and the democrats want to apply a Keynesian fix; if a workable hybrid is possible, I haven't seen that anyone is pushing for such, so the line on economics is clearly drawn.

Krugman is right once again, IMO, the centrists have done what they do best, which is to weaken anything they touch in regards to legislation.

One thing is certain, as long as politicians bend to corporate will and try to hide a keynesian fix within absurd rhetoric that free market fundamentalism is alive and well and will be just fine once we get past this "rough patch," all efforts will continue to be watered down half-assed measures that will ultimately fail.

The political / corporate powers behind the curtain do not want to get off the laissez-faire gravy train, and through GOP-led opposition and diversion they plan to wrench us back into hardline free market fundamentalism as soon as possible, touting the failure of a Keynesian half-measure as their proof that they were right all along.

[ProudLiberalDan]

If we had a Senate Majority Leader with some balls, this never would have happened.

LBJ would have found a way to strong-arm vulnerable Republicans into not filibustering.

What a colossal failure "new politics" turned out to be.

[research]

50 Senators plus the VP can nuke the filibuster.

50, not 60, not 2/3, not 5/8.

50

http://en.wikipedia.org/wiki/Nuclear_option#Nuclear_option_readied
http://dir.salon.com/story/news/feature/2005/05/12/nuclear_option_primer/

[dphilip]

Rahm and Krugman are right...Yo­u can't let the opportunity to suck the taxpayer dry that this crisis represents go to wate...Let­'s spend as much as possible so it will NEVER possible to lower taxes....

[ProudLiberalDan]

Tax cuts don't create jobs. And any economic gains from the Bush tax cut when to the top 1%.

Tax cuts are in no way a priority as supply side economics has completely failed.

[joebaggadonuts]

Or else: http://uk.reuters.com/article/marketsNewsUS/idUKL666696020090209

[HallStyle]

http://www.youtube.com/watch?v=zygceqTiXbs

[Citizen-Jane]

Paul, is right this stimulis plan s*cks. It doesn't go far enough and the repugs helped to make sure that it was watered down for their political survival.

The repugs in their defiance will ruin this nation just to say "I told you so."

A vote by one vote means the same as a vote by 80.

[hellboundtrain]

It's already done.

[Chaimirija]

Just think about it: if not for the federeal gov't we would all be at the mercy of the corporations and the uber wealthy.

just think about it, that is all I am asking...a­nd pass the thought along..

[philipwitak]

amen.

and whether huffpo readers agree or disagree, i suggest they each read the chris hedges commentary entitled: "its not going to be ok" published about a week ago in robert scheer's truthdig newsletter.

http://www.truthdig.com/report/item/20090202_its_not_going_to_be_ok/

[Moka11]

I read the Hedges piece. Everyone should read it.
There is no stopping what is to come.

[sixx]

Krugman. "Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out."

I don't think 'centrists' is the right word for these politicians. I would call them legis-negators. The election, the will of the people, and democracy itself have all been nullified to continue the financial status quo. The worst of these nregators are those from the majority Democratic Party, Reid and Durbin to name two in the forefront. To believe them, you must believe that a small minority have run the economy into the ground, (there was nothing they could do), and now that the opposition is smaller and less powerful, (there is still nothing they can do). Reid and Durbin have deliberately confused the vote to close debate with the vote to pass legislation. One would suspect that even if they had 75 votes they would still falsely claim impotence so as to serve their corporate masters.

[Cynth]

Good point. I tend to be moderate, but I don't at all agree with what they did to dilute the stimulus plan.

[Chaimirija]

Ray L Hunt of Halliburton shares a board with John F Akers of the New York Times.

Time Warner owns CNN. Richard Parson of Time Warner shares a board with Kenneth Derr who is on the board of Halliburton.

BUMP

PASS THIS IN

Walt Disney owns ABC News. Aylwin Lewis is on the board of both Walt Disney and Halliburton

Franklin Raines of Time Warner(CNN) is on the Fannie Mae board of directors with Ken Duberstein who is on the ConocoPhilips (Oil & Gas) board with Norman Augustine who is one the Lockeed Martin board (a private company that sells weaponry to the department of defense)

KENNETH DERR IS ON CITIGROUP BOARD, AND SHARES THE HALLIBURTON BOARD WITH ALWIN LEWIS OF WALT DISNEY (ABC NEWS)

THE NEWS MEDIA DOESN"T WANT PRESIDENT OBAMA TO WIN!

[liveandlearn]

i hope (in this order) the senate passes approximately the stimulus bill they face; the conference committee restores the cut items; and both houses pass it quickly.

why do republicans want to throw us into depression?

[Chaimirija]

look at what happended the last time taxes were cut to 25%..maybe they want a war? they def want us to be indebted

[larry278]

Bad guess, Paul. Stick around; adversity has made other American Presidents into greats: Lincoln, FDR Adverisity has destroyed others: Hoover, JFK, LBJ, NIXON & W. Obama has a long & rough way to go. Talk to us in 10, 12 & 16 years. We'll see how & what Pres Obama has done. Adversity is a cruel master but adversity can be overcome. "We shall overcome." became a popular mantra, hymn & rallying cry in America a few years ago. A lot of us remember it, were inspired by it & acheived a great deal by uttering it. Pres Obama is a man of color. He can & will inspire us to say, "We shall overcome." , as Dr King, another man of color, said & inspire us to greatness as we say, "We shall overcome."­; deal with our shortcomings, change, survive with a different, more inclusive, new national character & resolve. Surely it will be difficult. We are a people who have survived & freely chosen to change to overcome daunting difficulties.
Pres Obama used change as his campaign cry. Americans elected the man who cried "change" as POTUS #44.
The man, Obama, & the people, American, are ready for change. There will be a change, for the better, with Pres Obama.

[ProudLiberalDan]

Please stop reading Obama's press releases.

"New politics" has been a total failure. Change will only come if Obama will fight conservatives to make it happen and he won't.

[zendem1]

The GOP believes that the Constitution gives every man, woman, and child the right to starve.

[research]

Are we serious about the investment in Americans?

Are there 50 senators, who will use whatever rules allows to pass it?

Just 50 Senators determined to pass it?

IF so, prepare to nuke the Filibuster.

http://en.wikipedia.org/wiki/Nuclear_option#Nuclear_option_readied
http://dir.salon.com/story/news/feature/2005/05/12/nuclear_option_primer/

[TJCole]

This is how our government has worked for many years now...

Think of our economy as a little kid who has fallen through the ice and is 12 feet away from you, and you need a rope to save him...

Our government will rush in and hand you a 9 foot rope...

[TRYKER]

If Tax Cuts return $l.03 on every dollar, but Food Stamps return $1.74 for every dollar...p­ut it in Food Stamps. Shout from the housetops that tax cuts are the LEAST stimulating. What the hell did all Bush's tax cuts give us? The rich got richer and we got DEBT DEBT DEBT! And rethugs are finding believers.­..still? Slap their faces!

[GoogleMaster]

I think that my stimulus check last year was enough to pay for the gas I used to go cash my stimulus check. I don't think that nickels and dimes given to middle America are going to get them to sigh with relief that the storm is over and go out on wild spending binges. Especially if they don't have jobs .. which this stimulus spending bill will supposedly create. I wonder what the republican's gripes were about the food stamps example. $1.74 for every dollar spent. Perhaps they're labeling things "pork" when in fact they really are stimulative.

[Cynth]

Sure, food stamps will generate better returns, but what's in it for *them*?

[AlieNation]

Even before the Republicans totally screwed up this so called “stimulus bill” it was already headed in the wrong direction. Obama is offering a band-aid approach for problems that require radical, systemic intervention. What we should be focusing on is building new industries which can drive this economy far beyond the quick fix solutions which simply pump dollars into an abyss.

For example, imagine the massive solarization of the entire southern portion of the United States (up to three hundred miles inland). Imagine building manufacturing plants across the country to produce solar products which will bring clean and plentiful electricity to homes and schools, factories and businesses. Not only will we employ people to work in these new manufacturing facilities but also in every job involved in the process from natural resources mining to the sales, delivery. and most significantly, the installation and set-up of the finished products.

We can create new jobs that will last as long as the sun still shines. Not only will we employ millions of people nation wide, we will also bring in an era of clean, zero carbon energy. And by shifting many natural gas resources , which will no longer be needed, from the southern to the northern parts of the country we will reduce dependence on foreign oil.

Mr. Obama, we need bold action. Watered down, half hearted measures will not suffice. In fact they are doomed to fail.

[JimR]

The bill was a joke even before Republicans got in the mix, that's the problem.

[Bernique]

If Congress keeps watering down his sensible Stimulus bill, President Obama should pound his fist on the table, and make them pass it (think FDR). We are now the majority, aren't we? If Professor Krugman thinks it's too small, it probably is (and we all know it). Gosh, sometimes I think we live under some sort of republican fascism complete with intransigeant bullies, robots, unresponsive to reason, compassion or common sense.