> Summers was not Obama's political advisor; he was his economic advisor.
Right. And if you go back to the Lizza quote, you'll see the number one argument, made by his political advisors, was political.
Summers was argument number 3. (2, to be honest, seems trivial and misunderstood.) And it evidences fear that going too far could be as dangerous as going not far enough.
As Krugman said in his epitaph post, they fear 2 things: (1) political opposition and (2) spooking the market. Summers argument above is classic (2).
So it's not that they underestimate the problem. It's that their afraid fully solving it will cause new problems. That's why they hold back.
Michael