Smarter lions than I are trying to clarify the still-fuzzy details of Obama's stimulus package, but from some of the early predictable political jockeying just doesn't seem that intellectually honest.
Worry about the deficit and the national debt, by all means, but if you do so, and if you supported President Bush's tax cuts, you must be prepared to explain why coupling cutting taxes during a time of economic expansion with flintiness during the worst recession in 50 years makes any sense whatsoever.
Moreover, a smart economist friend notes that, with nominal interest rates at their nadir, the Treasury is borrowing money short term at no cost and money over the long term at virtually no cost. Real interest rates (nominal interest rates minus inflation ) are higher, everyone worries about deflation, and investment alone won't do enough to stop the spiral. One of the goals of the stimulus package, therefore, is to increase inflation, which would get those real interest rates down.
One of the political/policy challenge for Obama and Congress is to balance the size of the stimulus with a concern about the perception of the deficit over the long-term; the more people think the government is going to borrow and spend over the long-term, the quicker interest rates will rise; if they rise rapidly, a smaller stimulus package wouldn't stimulate much of anything.
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