obama today has been working to his traditional strengths, going back to the campaign trail while still a president to try to drum up support for his stimulus bill. novel and interesting.

he said it. he said he should have started with 0 tax cuts and given republicans all the credit.

anyway, i've read public choice critics who say that this will probably be a lesson for him. they argue that bipartisanship works in politics by making both parties feel like they've won something, not by satisfying pre-held ideological beliefs (you can see that this is quite a public choice view, in its cynicism regarding government motives).

so if you did hold beliefs that the true size of your stimulus is $800 billion, your opening gambit needs to be +50% of that, and no tax cuts. Then you make a grand gesture cutting half of that, and converting some of that bill into tax cuts. the republicans come out looking like they've won significant concessions, the president looks like he's brought change into washington and the democrats/economists who want a big stimulus get what they need. so the argument is that obama needs to appear receptive by starting tough.

It is a fine line though. If you did put out a package for $1.2 trillion then you might have problem selling the package and look like a fool, because then you'd have a lot of stupid projects on it, and you risk complete failure of your project. also, maybe the true size of the stimulus is significantly less than $400 billion anyway. you see, who the hell knows? the common source is that GS etc predicts there will be a 7% output gap, but you throw a couple of billion dollars here and there, who really knows?

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