The statement that President Obama made in his radio address in defense of the stimulus package:
“The Recovery Act was not designed to work in four months – it was designed to work over two years,” Mr. Obama said, after telling listeners that the plan hadn’t been intended “to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall.”
is rather clearly a response to those who’ve criticized its effectiveness:
“I realize that when we passed this Recovery Act, there were those who felt that doing nothing was somehow an answer. Today, some of those same critics are already judging the effort a failure although they have yet to offer a plausible alternative.”
Is he setting the stage for a second stimulus package? I don’t seem to recall that having been the way the package was originally advertised. Perhaps the recollection of others differs.
With only minor revisions the statements above can equally be taken as a rejection of a second stimulus package: “it was designed to work over two years”. Presumably, that would mean that it should be given two years to work before coming back for seconds.
Frankly, I’m skeptical of the ability of central planners to see that far into the future. Make no mistake: some sort of stimulus package was politically necessary. However, my preference would have been for a smaller plan the entirety of which would have been spent by the fourth quarter of 2009.
Note that experience has completely supported the observations I made several months ago: that bureaucratic processes and resource contention make it very difficult for the federal and state governments to respond in as spritely a manner as the fiercer advocates for Keynesian fiscal stimulus demand.
The Washington Post queries a number of worthies on the subject of a second stimulus. The answers vary from the partisan to the practical to the delusional.