In advance of tomorrow’s big econ speech, President-elect Obama sat down with CNBC’s John Harwood to talk stimulus, the economy and the Presidential transition. Judging from Obama’s strategy on the stimulus, it sounds like he’s learned well from his brief time in the Senate. Regardless of what he intends or targets, the “congressional process” will inflate the size of the stimulus.
Obama and Biden have both said they want the bill pork free, but as economist Russ Roberts recently said, “Hoping the plan won’t have any pork in it is like hoping a ham sandwich won’t have any pork in it.”:
HARWOOD: …why stop at $775 billion? Why not go to the $1.2 trillion that
some economists have recommended? Is that because you think that the
political figure of a trillion dollars is too politically charged to get over?
Is it because you think more spending would be pork rather than stimulus? Or
do you think you’ve figured out exactly the right amount of stimulus that’s
Pres.-elect OBAMA: Well, first of all I think it’s important to note that
every economist, conservative or liberal, at this point agrees that we have to
have a substantial recovery plan that helps to jump-start the economy, that
short term it’s going to be expensive, but it would be much more expensive to
see the economy continue in the tailspin that it’s been going in. We’ve seen
ranges from 800 to 1.3 trillion and our attitude was that given the
legislative process, if we start towards the low end of that, we’ll see how it
develops. We are concerned…
HARWOOD: It’s going to get bigger.
Pres.-elect OBAMA: Well, we don’t know yet. But what we are concerned about
is making sure that the money is spent wisely, that there’s oversight, that
there’s transparency. We are going to use this money to temporarily boost the
economy, to create or save three million jobs, but also to put some down
payments on things that we should’ve been doing over the last several decades
that can help create a more competitive US economy. Examples: making sure
that we are doubling alternative energy, and creating much more efficiency in
our buildings and in our transportation systems, making sure that we are
reducing the cost of health care using health information technologies,
building up world class schools so that our children are benefiting and can
compete in the global economy. So what we want to do is make sure that any
money we’re spending is, number one, creating jobs, stabilizing the economy,
but also is being used prudently so that when we come out of the current
stretch that we’re in, we’re going to see a stronger economy, a better
economy, a more efficient economy.