Complex issue. Note the hidden assumptions in the following

Two well-known Washington political analysts, Thomas Mann, of the bipartisan Brookings Institution, and Norman Ornstein, of the conservative American Enterprise Institute, agree. In a forthcoming book about Washington dysfunction, “It’s Even Worse Than It Looks,” they write, “One of our two major parties, the Republicans, has become an insurgent outlier—ideologically extreme, contemptuous of the inherited social and economic policy regime, scornful of compromise, unpersuaded by conventional understanding of facts, evidence and science, and dismissive of the legitimacy of its political opposition.”

via Barack Obama, Post-Partisan, Meets Washington Gridlock : The New Yorker.

The phrase, ” , contemptuous of the inherited social and economic policy regime, scornful of compromise, unpersuaded by conventional understanding of facts, evidence and science, and dismissive of the legitimacy of its political opposition.” actually also describes the attitude of many progressives and independents. What is going on? Both groups are angry at the leadership of the country that has gone financial rather than middle class and including all workers. But there is no politics for this anger, so people polarize along trivial issues to express what is hard to express. The fact that the vast majority of the country is deeply angry, disgusted and even scared, doesn’t gain legitimacy, so those views are, as above, dismissed as nuts.

The following is quite reasonable and good to know about.

The initial debate was framed by a fifty-seven-page memo to the President-elect, dated December 15, 2008, written by Larry Summers, his incoming director of the National Economic Council. Marked “Sensitive and Confidential,” the document, which has never been made public, presents Obama with the scale of the crisis. “The economic outlook is grim and deteriorating rapidly,” it said. The U.S. economy had lost two million jobs that year; without a government response, it would lose four million more in the next year. Unemployment would rise above nine per cent unless a significant stimulus plan was passed. The estimates were getting worse by the day.

Summers informed Obama that the government was already spending well beyond its means. Yet in the coming months Obama would have to sign, in addition to a stimulus bill, several pieces of legislation left over from the Bush Administration: a hundred-billion-dollar funding bill for the wars in Afghanistan and Iraq; perhaps three hundred and fifty billion dollars more in funds from Bush’s TARP program, to prop up banks; and a four-hundred-and-ten-billion-dollar spending bill that was stuck in Congress. Obama would need resources to save G.M. and Chrysler, which were close to bankruptcy, and to address the collapsing housing market, which he was told would be hit with five million foreclosures during his first two years in office. Summers cautioned Obama, who had run as a fiscal conservative and attacked his Republican opponent for wanting to raise taxes, that he was about to preside over an explosion of government spending: “This could come as a considerable sticker shock to the American public and the American political system, potentially reducing your ability to pass your agenda and undermining economic confidence at a critical time.”

Obama was told that, regardless of his policies, the deficits would likely be blamed on him in the long run. The forecasts were frightening, and jeopardized his ambitious domestic agenda, which had been based on unrealistic assumptions made during the campaign. “Since January 2007 the medium-term budget deficit has deteriorated by about $250 billion annually,” the memo said. “If your campaign promises were enacted then, based on accurate scoring, the deficit would rise by another $100 billion annually. The consequence would be the largest run-up in the debt since World War II.”

He offered the President four illustrative stimulus plans: $550 billion, $665 billion, $810 billion, and $890 billion. Obama was never offered the option of a stimulus package commensurate with the size of the hole in the economy––known by economists as the “output gap”––which was estimated at two trillion dollars during 2009 and 2010. Summers advised the President that a larger stimulus could actually make things worse. “An excessive recovery package could spook markets or the public and be counterproductive,” he wrote, and added that none of his recommendations “returns the unemployment rate to its normal, pre-recession level. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.”

Read more http://www.newyorker.com/reporting/2012/01/30/120130fa_fact_lizza#ixzz1kP288IVh