James Pethokoukis has done an excellent job redacting some of the revelations that were uncovered by a piece in The New Yorker by Ryan Lizza about the first days of the Obama White House. One of the source materials for Lizza’s piece was a 57-page memo by economist Lawrence Summers written in December 2008. Summers, who would soon be appointed head of the incoming president’s National Economic Council, provided a fascinating blueprint for the new administration policies. Pethokoukis lists 11 main points that tell us all we need to know about the economic stimulus package that the Democrat-controlled Congress passed at Obama’s behest.
Chief among them is this: the nearly trillion-dollar expenditure package was primarily about implementing Obama’s political agenda, not fixing a damaged economy.
The Summers memo is clear evidence that much of the rhetoric put forward by the administration and allies was patent hogwash. The point of the stimulus was to keep campaign promises about making sure federal dollars flowed to pet projects, especially on the energy sector (think Solyndra), not the vaunted benefits to the economy that were promised.
Other points gleaned from this memo is the fact that the administration knew the deficits they were piling up were dangerous and that, despite subsequent claims it should have been even bigger, those inside the White House already knew more spending was not realistic. They also knew the price tag for this boondoggle was higher than they said it was.
It makes for important reading now, but the main conclusion to be drawn from this investigation is that much, if not all of what we were told about the stimulus was a flat-out lie. Above all, the public must treat the president’s promises of the benefits of future expenditures — to be financed by tax increases — to the sort of scrutiny the original stimulus did not receive.