Point of Obama Op-Ed: Stimulus II In Turnaround


President Obama's Washington Post op-ed contains an item of interest: The president is putting an official kibosh on plans for a second stimulus package:

The American Recovery and Reinvestment Act was not expected to restore the economy to full health on its own but to provide the boost necessary to stop the free fall. So far, it has done that. It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall. We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.

There's more, including some expensive-sounding plans (thrown away in the bottom grafs) to "reform our community colleges" and help Americans "better afford a college education." Bill Kristol slams the president for failing to promote profit, markets, enterprise or invasions of other countries.

But the most important thing is the rejection of the second stimulus. By Paul Krugman's lights that means the president doesn't understand basic logic, but it's a relief nonetheless. As Mish Shedlock writes:

This is good news for the treasury market as well as good news for fiscal sanity, but I doubt the stock market sees it that way. Keynesian clowns will not see it that way either.

I am all for waiting two more years to see if the first stimulus works given that the whole idea of stimulus packages is misguided from the start.