Setting the stage for President-elect Barack Obama's rollout today of his economic team, one of his top advisers said this morning that he is committed to a stimulus plan to create and save 2.5 million jobs in the first two years of his administration.
But Austan Goolsbee refused to put a number on the package, with reports that it could total $700 billion or more over two years.
"Look, it needs to be as big a number as it needs to be. I really mean, it's got to meet the task at hand," Goolsbee said on MSNBC.
"The era of dithering that I said that coming to an end of January 20th is economic dithering, sitting, and waiting for crises to land on you and not doing anything to prevent them," he continued. "So as I said, we've tried not doing stimulus. We've tried not having a housing program. We've tried not giving tax relief to ordinary Americans. And if you look out on the window, that's not working out so well. So that era is going to end when Barack Obama becomes president."
On CNN, Goolsbee outlined what the stimulus package would include. "It ought to take the form, in President Obama's view, of investments in the things that we know we're going to need going forward, but investments that can take place within the next two years," he said, adding that it could entail "infrastructure spending on roads, bridges, schools; spending for green energy, renewable energy; tax cuts for ordinary Americans. Things of that nature that can get out the door within a short time frame, and really try to head off what is looking to be the most serious downturn in decades."
Goolsbee, an economist at the University of Chicago, acknowledged that it would increase the federal deficit, with some estimates that it will top $1 trillion in the fiscal year that ends next September.
"The thing with stimulus is, it is going to increase the deficit. That's what it has to do," he said.
"In the short run, we're facing a very large deficit, but it's one that we have to incur. Because if you try to reduce the deficit or balance the budget in the face of the stiffest recession in decades, you threaten to repeat the mistake that caused the Great Depression. They have a banking crash, and then Herbert Hoover starts trying to balance the budget and drives things further and further down the tubes," Goolsbee added.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at email@example.com. Follow him on Twitter @globeglen.