The tendency to attribute outright magical powers to government spending has gotten slightly out of control. It's appropriate to ask the same question that should have been asked of Republicans in 1980: if all this is so marvelous, why don't we just do it indefinitely--slash tax rates to zero, borrow and spend forever?
The answer is that there are declining returns to all of this. At some point, the Laffer Curve maximizes, and any further cuts cost the government money. Similarly, the trillionth stimulus dollar probably isn't nearly as effective as the first.
My own impression is that Obama's econ peeps are well aware of this. We may well be surprised by their fiscal conservatism. In fact, I think we may be. There are many aspects of this administration that are shaping up to be more authentically conservative than the Bush administration. That's one reason Paul Krugman remains so pissed off. And one reason Obama may succeed.
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