The nagging worry I have is that the stimulus bill will jolt the economy for sure, might even cause some inflation too, but it will not resolve the underlying issue which is a freeze up on private credit. Building new schools and roads, a new electrical grid, etc. is probably way overdue and I don't disagree, but what does all this have to do with unlocking the credit crunch? Who is making the argument or do we have a $1 trillion disconnect?

The cross-over effect might be that more disposable income in the economy via stimulus will spur consumer demand and get consumer spending up but what happens if banks are unwilling to lend and credit continues to be tight-fisted? The real stimulus in terms of recovery generally occurs at the back-end of the recessionary cycle when businesses begin the process of rebuilding inventories and hiring back workers to get it done. But that decision is made "on the margin" with all things considered such as the business outlook and the willingness of banks to extend credit, even seasonal credit. Both parties have to agree that conditions are favorable to expand production. If either party falters, nothing happens.

The concern is that equilibrium in the economy may be occurring at a level of output that is way above full employment like 8%. That will be tragic in that we have had 3-4% unemployment for years now.

THis is what happened to Japan since 1992 and the US went thru this in the 70's until the tech boom took off.

Deliberately, of course, Joan, you failed to mention the attempt on the part of the White House to control the 2010 Census that currently resides in the Commerce Dept for centuries. Judd Gregg did not like that little underhandedness because it stinks of politics as usual.

Why wasn't this issue raised in your piece. I think you covered just about everything else that has happened this past week but that. You should be more "fair and balanced" in your presentation.

I smell a Rahm Emmanuel rat in this and Obama is really ticked off that this issue surfaced this week, of all weeks.

Hey Sirota,

What about all the dead bodies piling up on the other side of the Mexican border? And what about the gangbangers from the 'hood that moved the stuff to your local high school? Lots of blood was spilled getting that weed to the party where Phelps got caught taking a hit.

It is thoughtless statement on your part to declare that drug use is a victimless crime and nobody has ever died from smoking weed.

Joan,

I am not the slightlest bit surprised that Obama did what he did on national security issues. He is not going to kow-tow to Salon's "to-do list" in areas if national security and become the second coming of Jimmy Carter. He will be Mr. Nice-Guy when he wants to be and crack heads when it suits him. Sounds more like Reagan than Carter or Clinton. He obviously is not convinced that the lefties alone have the answers to all the worlds problems.

Good post. Joan needs to knock-off the lefty "check-list" mentality of all things lefty and focus on the overall agenda, which is called making decisions. Obama will be judged by his own self-imposed standards in 2012.

Obama is merely living up to his campaign promise to deliver the goods in Afghanistan and Pakistan and he needs to play rough in a rough part of the world. I also think he wants results sometime in our lifetimes so the Pragmatist-in-Chief is not ruling anything out at this point except interrogation methods that are illegal or could be illegal under the Geneva Convention.

The bigger issue for the Left is to define what it really wants Obama to do with Afghanistan/Pakistan rather than hyperventilate about side issues like detainee rights at some war zone detention center. If you want the US totally out of Afghanistan, then say so, and the detainee problem goes away the next day.

"Inflationary deflation" may be garbled but the risk is real. We are undergoing massive deleveraging of the world economy which is the root cause of the credit crunch and is causing price deflation, while at the same time, Obama is pumping $1 trillion into the economy in terms of a government cash transfers. Nobody really knows whether the $1T will simply cause rampant inflation or actually restart the economy. Our best hope is that the stalled economy will re-inflate gradually and get people buying again because the GDP is 70% of consumer spending. But if credit is too tight because underlying asset values have not yet recovered, the recovery will not take hold and the stimulus will be inflationary with too much money chasing too few goods. So timing is everything in this respect.

Bush's tax rebates of $187B lost their effectiveness by July of last year because the credit markets were crashing at the same time. Poor timing.

Even though Steele is inarticulate, I don't hear too many people getting real as to the underlying forces at work.

Joan,

You are racial profiling certain states and it is counterproductive. Unless you can get specific evidence that the black folks are being deliberately short-changed, you are not doing yourself a public service.

I can't believe I just read a fair and balanced assessment of one of the most dangerous places on earth on Salon, of all places. I guess Mexico is now the most dangerous. I would bet Obama and HRC agree with 99% of this article so I would "mail it in" as US policy for the next 4 years. I suppose that is why Salon printed it.