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For the Weekend: "The Past Was Close Behind…"

Department of "Huh?!": Who Was Noam Scheiber Talking to Department

Noam Scheiber:

The Lousy Jobs Number & Obama's Original Sin: Which, in the end, brings us back to the original sin of the Obama administration. As I report in my recent book on Obama and the economy, the administration’s top economists knew the amount of stimulus they were proposing was much too small to solve the unemployment problem within a few years. One reason they felt okay about this relates to a concept called “escape velocity,” which held that you didn’t need the full amount of stimulus your math suggested (something approaching $2 trillion). If you just provided an initial boost, the economy could take care of the rest on its own: Consumers would start spending, which would raise GDP, lower unemployment, and lead to further spending. And the whole process would accelerate as people gained confidence, leading to a self-sustaining recovery…

I don't know anybody who had lived through the post-1991 or post-2001 recoveries, and thought about the issues, who had any confidence in 2009 that the U.S. economy would experience a V-shaped recovery. Going small with the recovery package and reappointing Bernanke to head the central bank was a gamble--and was seen as a gamble at the time by everybody I could talk to…

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