No one knows the economic effects of all this; estimates vary. But Obama’s political strategy stunts the impact from what it might have been. By using the stimulus for unrelated policy goals, spending will be delayed and diluted. There’s another downside: “Temporary” spending increases for specific programs, as opposed to block grants, will be harder to undo, worsening the long-term budget outlook.
Politics cannot be removed from the political process. But here, partisan politics ran roughshod over pragmatic economic policy. Token concessions (including the AMT provision) to some Republicans weakened the package. Obama is gambling that his flawed stimulus will seem to work well enough that he’ll receive credit for restarting the economy — and not be blamed for engineering a colossal waste.