The President's Stimulus Problem: Rhetoric, Mismanaged Epectations, and Reality

One of the most poignant criticisms of the stimulus when it was being debated was that most of the stimulus was not going to be spent until 2010 and beyond. Here we had a president proclaiming that the economic apocalypse was upon us. Then, he proclaimed we had no time to debate the stimulus. Yet, the president's own estimations pointed out that the stimulus would take years and years to spend. The argument I just made about the slow nature in which the stimulus would be spent was made effectively during the stimulus debate. At the same time, the country was gripped with fear, the president was extremely popular, and he had the legislative winds at his back.

Now, some are proclaiming that the stimulus has failed. Of course, the reality is that the government hasn't spent nearly enough of the stimulus to judge success or failure. The government has spent no more than $100 billion of the $787 billion set aside. If all it was going to take was $100 billion then we weren't really in much of the way of economic dire straits.

Here's the problem in a nutshell.

Administration officials contested claims that the stimulus money has flowed more slowly than anticipated. "We're actually doing better than expected," said Jared Bernstein, the vice president's top economic adviser. By the administration's calculations, almost 25 percent of the money has been obligated -- roughly $200 billion -- in about a quarter of the days in the life of the package. Officials argue that obligating t he money triggers economic activity, even if all the money is not yet spent.

Officials say the impact will be greater in coming months. "The second hundred days, you're going to see a lot more jobs created," Biden said Sunday.

Senior officials say they believe the plan is on track, despite criticism from Republicans and grumbling from some Democrats. Which is why they say it is premature to decide whether a second stimulus package is needed. Obama said the question of whether there is something more to do is something "that we wrestle with constantly." But he added that there are legitimate concerns about the size of the deficit all the current spending will create.

The problem is that in fact it has been spent exactly as quickly as the administration expected.
Just think about it this way. The problem was so urgent that the bill had to be passed before anyone could read it. It was so urgent that normal debate wasn't an option. It was so urgent that the president didn't follow through and allow the bill to sit on his website for five days before signing it. Yet, it isn't so urgent that the administration has figured out how to spend more than one eighth of it after nearly six months. Unemployment is ballooning. Our economy is disintegrating. Meanwhile, the message from the White House is just wait. Give us another six months and then we'll really crank it up. That's simply not good enough for all this without work. The White House needs to spend the stimulus with as much urgency as they had in scaring everyone into passing it.

There's simply no way to square that economically, philosophically, or politically. They set a sense of urgency to pass the bill. The size of the bill was huge. Yet, they spend the bill at a snails pace. If the economic situation has a sense of urgency, then there must be a sense of urgency in executing the stimulus.

The reality is that governments can't spend money with urgency. That's why having the stimulus be effective was always an uphill battle. It's easy to scare people into agreeing to pass the stimulus. It's easy to sell its worthiness. It's nearly impossible to execute it in a manner that will make a difference when you want it to.

The president is caught between his rhetoric, the size of the stimulus that was borne out of that rhetoric, and the harsh reality of executing that stimulus. It's what most of us that criticized the stimulus during debate pointed out, and now the president is seeing the problem first hand.