From January 2009: Krugman's Eerily Prescient Prediction Of The Recovery Act's Limits And McConnell's Reaction: The political constraints on the Obama Administration in January, 2009, were very real. Even if the president had pushed for a much bigger stimulus, it's unlikely Congress would have passed one, at least as long as the filibuster remained in place. Still, this excerpt from a Paul Krugman column is downright eerie:
This really does look like a plan that falls well short of what advocates of strong stimulus were hoping for — and it seems as if that was done in order to win Republican votes. Yet even if the plan gets the hoped-for 80 votes in the Senate, which seems doubtful, responsibility for the plan’s perceived failure, if it’s spun that way, will be placed on Democrats.
I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”
Yup. The only thing Krugman got wrong was the unemployment rate. It peaked even higher, topping 10 percent.