On Jul 13, 2011, at 12:21 PM, Jordan Hayes wrote:
> Doug writes:
>
>> Summers was an advocate for stimulus.
>
> And yet: he was only an advocate for doing "the bare minimum" -- and Romer says he was a bully, and got his way.
He claims otherwise. Via Brad de Long:
HOBSON: Well you mentioned payroll taxes. You recently called for a new stimulus in the form of a payroll tax cut. But it's been reported over and over again that within the Obama administration -- when you were in the administration -- you were actually on the side of a smaller stimulus back in 2009.
SUMMERS: Not accurately. Not accurately.
HOBSON: That's not true? You weren't pushing for a less-than $1.2 trillion stimulus?
SUMMERS: No, I mean it's a much more complicated story, but those reports are not accurate. It was my judgment as an economist that there was no danger of doing too much stimulus and one should achieve as much stimulus as possible. There were a set of political calculations having to do with what the Congress could accept that were mostly determined by the president's political advisers and ultimately by the president which pointed towards the size of the program that was ultimately passed. But the economic advice that I gave was that the stimulus program should be as large as it could be.
HOBSON: Do you think it was too small in the end?
SUMMERS: I think it in the end we would've been better served if there had been more push to the economy. We would've been better served if the measures that the president put forward in the fall of 2009 for expanded infrastructure investment, for expanded support for state and local governments that passed through the House had also passed the Senate. But the choices that were made were made in a given political context and I think given the slender margins of one vote by which the Recovery Act was passed I suspect an effort to push it to a higher level might well have backfired and resulted in legislation not passing. And at that moment that would've have catastrophic consequences in terms of depression.
HOBSON: Well politics aside, do you think there's anything that the administration should've done differently in the midst of the financial crisis or the depths of the recession?
SUMMERS: I don't know what you mean by politics aside. Administrations exist in a political context. I've already indicated that I think that the imperative was to push the economy forward. I think the administration was successful in achieving as large a fiscal program at was possible in the political environment they faced. That it would've been desirable if it was still larger fiscal program could've been passed.