A little over a month ago I argued that we should recall the The American Recovery and Reinvestment Act. It was poorly designed, bloated, and wasteful. If Obama and the Congressional Democrats had specifically tried to put together a mix of policies and projects that would do as little as possible to help the economy in the short run, they couldn't have been more successful. You can't stimulate an economy by taking money from one person and giving it to another. It doesn't make sense, and it's never worked before. The list of failed, Keynesian pump-priming "stimulus" packages is long and growing. When will politicians learn they are futile?
What they should have done instead is to focus on things that change the dynamics of the economy on the margin. They only way to stimulate an economy is to increase the incentives to work, invest, and take risk. That can be done very quickly and easily by cutting or eliminating the corporate tax rate, cutting or eliminating the capital gains tax, or cutting and flattening personal income tax rates and reducing or eliminating deductions. All of these things could have been done without "spending" more than the $800 billion that will eventually (they've only spent 10% so far) be dumped down the "stimulus" drain. And these measures would have taken immediate effect, rather than trickling out over months and years. Change people's taxes today, and they will change their behavior and their plans tomorrow.
By acting in haste, by allowing Nancy Pelosi and Harry Reid to design the stimulus bill, by arguing that the urgency of the situation required immediate action rather than thoughtful debate, Obama set himself up for failure. He doesn't understand how economies work, and his every thought is colored by a conviction that smart people like him can move the levers of the economy to everyone's advantage. He can't propose another spending bill similar to the first, because that would expose the failure of his first. The first failed because a) it wasn't designed to be stimulative, it was designed to advance a spending agenda and to redistribute income, and b) very little of the money would be spent up front.
So why not recall this monstrosity of a stimulus bill before it wastes more money? Why not replace it with a genuine stimulus bill?