Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Desperate not to allow the recovery to grind to a halt, the Obama administration worked feverishly to pass a second round of stimulus in the lame duck session of the old Congress. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of December 2010 provided, by some estimates, a demand boost of as much as $858 billion.32 But it was a measure of their political predicament that the stimulus now consisted entirely of tax cuts, including the prolongation of the grossly inequitable giveaways for top income earners inherited from the Bush era. Two years into eight years in office, it would be the last major economic policy bill that the Obama administration would pass. In the New Year, with the new Republican Congress, they would be on the defensive. Because they included modest increases on the revenue side, the centrist recommendations of the Simpson-Bowles committee were dead on arrival, even though they were heavily slanted toward cuts in entitlements.