This Is The Memo That Could Have Saved The US Economy

Noam Scheiber, author of the hot new book, Escape Artists, has revealed a great new nugget today.

It’s a memo written in 2008 by Obama econo advisor Christy Romer.

The gist: The size of the stimulus needed to be around $1.8 trillion to actually accomplish the goal of closing the massive output gap.

The full memo is here, but here’s the key part.


Photo: Noam Scheiber

The President never saw the memo, but as Matt Yglesias explains, it was because Summers knew that given the dynamics of intra-White House politics, it was necessary to come with a more modest ask, so that the aggressive pro-stimulus camp would win over Geithner and Orszag, who were worried about a financial market freakout.

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