I don't want to take anything away from Obama, who by all accounts will get a big political boost out of the stimulus. According to David Rogers of Politico, it now looks like he could get 20 or more GOP votes in the Senate House,* which would be pretty remarkable and could have important implications for the rest of his agenda.
I also don't want to take away from the substance of the package, which is by no means insignificant. We're talking about billions of dollars for a new energy grid, expanded broadband access, highways, rail and other transportation projects, unemployment insurance, COBRA subsidies, food stamps, Medicaid, education, etc., etc. For many of these categories the figure is in the tens of billions. This is an important step in keeping the bottom from falling out of the economy.
What I find deeply frustrating is the widespread misunderstanding (or dishonesty) about what we're trying to do here. Listening to the Republican critics and Senate moderates, you'd think we were debating a question of values or political priorities, as if this were a debate over healthcare or welfare. In that sort of debate, one side thinks we should spend money to expand coverage, the other side thinks we shouldn't, and there's really no objectively right answer, just a collision of worldviews and interests. (That's not to say there's no morally right answer. I think there is. Just no answer that's verifiable outside someone's worldview.)
But the stimulus wasn't a political question--none of us wants to live through a decade-long depression. It was an engineering question--how do you prevent the economy from collapsing? And engineering questions do have objectively right answers. (We may not be able to come up with the answer exactly, but there is a right answer and we can get close.) In this case, we know the output gap will be about $2 trillion over the next two years. When you have an output gap that big, you've got to fill it or you risk a deflationary spiral. There really isn't much debate about this among economists, who are the engineers in this example. And yet you have people treating it as though it were a political question--Republicans objecting on principle to the idea of a stimulus, centrists scaling it back because they think it's irresponsible to spend so much.
By way of analogy, suppose there were some deadly disease spreading through the population, and that public health experts agreed we had to spend around $10 billion on vaccinations to avoid an epidemic. Since no one wants to see millions of people die, this doesn't really pose a political question. It poses a technical question, and the experts have told us what it's going to take (in their best judgment). In that context, does it make sense for one side to oppose the response because it requires too much big government? Does it make sense for a group of centrists to get together and say, "Well, $10 billion seems like a lot, but we'd sign on to $7.5 billion?" Of course not. That's lunacy. And yet the Republicans and Senate moderates have basically imposed this outcome on us in the stimulus back and forth.
P.S. This is hardly the only case where we've allowed the GOP to confuse political and technical questions. Global warming would be an obvious second example.
*Note: This obviously didn't happen. Not a single House Republican voted for the final version of the stimulus.
--Noam Scheiber