Jon Chait reads the secret Romer memo saying we needed $1.8t stimulus, and finds that the evidence shows the administration asked for a smaller and too-small stimulus on purely political grounds.
The counterfactual is what would have happened if Obama had proposed a much larger stimulus to begin with. His political team believed it would have risked delaying the bill or caused it to collapse entirely. Perhaps. It’s also possible it would have simply shifted the frame of the debate, so that “large” was now defined by $1.8 trillion rather than $800 billion, and the “centrist” position would settle in at, say, a trillion and a half or thereabouts.
This is what you would do if you were buying a car or a house. It is elementary bargaining. It is something that even the most lackluster of legislators does, or should, know. Why it is coming as a revelation now, I cannot imagine.
The Edge of the American West 
4 comments
February 22, 2012 at 11:36 am
pa joe
Now that this memo has been public, Obama looks weak since Summers was in charge. It’s a shame that nobody will suffer the consequences of this catastrophe, except for the jobless and those who were foreclosed on. They’re just collateral damage in the scheme of things.
Obama will likely be reelected, and the rest will continue to be allowed in polite company.
February 22, 2012 at 12:29 pm
Anderson
And Obama still hadn’t learned Negotiation 101 when he agreed to extend the Bush tax cuts, and didn’t get a debt-ceiling deal nailed down as part of the consideration.
February 22, 2012 at 1:29 pm
jroth95
Where’s Scott Lemieux to tell us all that politics and positioning are irrelevant, and that Susan Collins was conceived with $800B as a dividing line in her DNA, and therefore Obama could not possibly have gotten another dime of stimulus, and so PUMA-like Obama haters should just STFU?
I’m sure Ezra would be happy to chime in with some excellent word from his sources indicating the same thing.
Not that I’m bitter.
February 22, 2012 at 4:45 pm
capital is winning
wow, that’s as big as the Chinese stimulus package.