Their complete devotion to the failed theory of Keynesian economics is without question.
WASHINGTON — As policy pursuits go, none has had more consequence for the Obama administration than the stimulus: Not only did the American Recovery Act determine the size and scope of the economic mending, it established the ideological battle lines across which many of the subsequent legislative battles were waged inside the White House.
There has been no shortage of literature to dissect how President Obama handled the stimulus debate. But a new book by Noam Scheiber of The New Republic, “The Escape Artists,” sheds new light on the matter.
As Scheiber writes, members of the president’s economic team felt that if they were to properly fill the hole caused by the recession, they would need a bill that priced at $1.8 trillion — $600 billion more than was previously believed to be the high-water mark for the White House.
The $1.8 trillion figure was included in a December 2008 memo authored by Christina Romer (the incoming head of the Council of Economic Advisers) and obtained by Scheiber in the course of researching his book.
“When Romer showed [Larry] Summers her $1.8 trillion figure late in the week before the memo was due, he dismissed it as impractical. So Romer spent the next few days coming up with a reasonable compromise: roughly $1.2 trillion,” Scheiber writes.
As has now become the stuff of Obama administration lore, when the final document was ultimately laid out for the president, even the $1.2 trillion figure wasn’t included. Summers thought it was still politically impractical. Moreover, if Obama had proposed $1.2 trillion but only obtained $800 billion, it would have been categorized as a failure.