"I think that the boldest part of [the stimulus] is that it is big and that it gets money out there quickly for the right sorts of things."
That's Alice Rivlin, Brookings Institute, former director of the Office of Management and Budget under Bill Clinton, in a interview on NPR yesterday, February 1, 2009. (Listen here). What are the "right sorts of things" in stimulus package, according to Ms. Rivlin? Palliative spending (e.g., unemployment insurance) and tax cuts and credits. This is the short term "Division B" of the package (1, 2, Hilzoy's response, 3, 4).
And, not to beat a dead horse (too late!), Ms. Rivlin agrees that Division B -- the short term part of the stimulus package -- should be decoupled from Division A of the package -- the long-term infrastructure and other projects. Division A and B address different concerns and should be in different bills.
Yet, Ms. Rivlin also understands why President Obama has put the two, very different divisions together: It makes the package look bigger. And that, apparently, is bold.
Please. Big is not the same as bold. Big's easy: just throw more money in the pile. Bold is hard. Bold requires that the money be spent for a purpose.
The politics of the package should match its reality. If we need a bigger short-term punch, and we probably do, then we should be talking about increasing the size of the short-term direct payments and tax cuts in Division B of the package. We do ourselves no favors by eliding this fact. Even assuming the most liberal multipliers for the spending in Division A*, the money in Division A is not going to enter the economy fast enough to be President Obama's promised "jolt."
Nor is it wise to rush through the complicated infrastructure and other proposals in Division A just to try to make Division B look bigger. Bold is hard. Take some time to be bold in the spending in Division A.
Pass Division B quickly, without Division A. Make Division B bigger, even, if you can find worthwhile ways to do so. But spend a single extra month -- one month! -- considering the provisions in Division A. Division A is long-term: The stimulus for tomorrow. Everyone, Democrats and Republicans alike, should take a moment and consider what kind of tomorrow they'd like to live in. As Rep. Mica noted, lamenting the absence of a serious plan for high speed rail corridors in the package:
"They keep comparing [Division A] to Eisenhower, but he proposed a $500 billion highway system, and they're going to put $30 billion" in roads and bridges, [Mica] said. "How farcical can you be? Give me a break."
UPDATE: And what of the housing crisis, which is largely ignored by this plan?
*A detailed Democratic analysis of a prior stimulus plan is here (pdf; I understand that there may have been some changes since that version of the plan). A more recent view, which Brad DeLong accurately calls "White House talking points," is here. (H/t Kevin Donoghue.)