Andrew Sprung bats around K-Thug:
Krugman has implied elsewhere that the right-sized stimulus would have set the economy roaring back to life. To what degree is that credible? If Obama had asked for $1.2 trillion and got $950 billion, what's the math on the counterfactual? Unemployment at 8.3%? And the effect of such a drop on the electorate? I confess it could be substantial. But there's an awful lot of what-ifs there, beginning with the premise that a substantially larger stimulus could have got through the Senate. And the narrative leaves out some externalities, such as the Euro sovereign debt crisis, which seemed to stop a decent-looking recovery in its tracks. Not to mention the credible possibility, forecast now by a growing number of economists and business leaders (e.g., here and here), that a substantial recovery may be on the horizon now.
Krugman's critique of the Obama administration has real bite. But neither he nor anyone else knows what would have been, what will be, what the full or long-term effect of the Recovery Act will be, or what the effect of a Krugman-designed stimulus (passed through the Congressional wringer) would have been.
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