The Magic Trillion

Ezra Klein’s article on the stimulus and the devastated economy of 2009 is very much worth reading in its entirety. This is a key takeaway:

But it is hard to credit the argument that the stimulus could have been much larger at the outset. This was already the biggest stimulus in U.S. history, and congressional leaders had been quite clear with the White House: Don’t send over anything that passes the trillion-­dollar mark. To try and double the bill’s size based on a suspicion that the recession was much worse than the early data indicated would have been a hard sell, to say the least.

It is very possible that the Obama administration could have gotten a marginally better stimulus package with a marginally higher opening bid. But as I’ve said before, the idea that Obama could have gotten a marginal reduction of a much higher opening bid is implausible in the extreme. Regardless of what some people seem to think, offering $80,000 for a Park Avenue penthouse is not a clever, sophisticated negotiating tactic. As the fact that many opponents of the stimulus tried to portray the stimulus as a trillion dollar package anyway, it seems pretty clear that the trillion dollar mark is where the median votes in the Senate would have gotten off the bus. Even without knowing that the congressional leadership had actually taken that position, if a lot of money had been left on the table the bill wouldn’t have passed that narrowly.