KeithHennessey.com

Real GDP shrank at a 1.0 percent annual rate in the second quarter of this year.

We need the macroeconomic benefits of the stimulus now. The Administration is in a box because they want to argue that the economy has improved because of their policies, and that the stimulus has contributed to that improvement, but they cannot show that enough stimulus money has yet entered the economy to have a measurable effect.

Provoked by the Vice President’s comment on Sunday that the Administration “misread the economy,” the Obama Administration is partway through an unplanned shift in their topline economic message. It’s hard to reconcile a “stay the course” strategy with (a) new bad data, (b) “we misread the economy” and (c) “we had incomplete information.”

House Majority Leader Steny Hoyer and Rep. George Miller write in today’s Wall Street Journal in favor of their pay-as-you-go, aka “paygo” rule. I have a different perspective and offer it here in response.