Great article Ed, but is it being too pessmistic? It seems to be looking at the US in isolation whereas by September 2009, other countris’ stimulus packages, including China’s may have started to kick in too and perhaps.

That also surely has an impact on trade when you mentioned Feldstein’s prediction of $500bn losses, is that just what US consumers would be spending or what the US economy would lose, as presumably much of US spending actually is on imports, so the numbers wouldn’t be quite the same, possibly lower?
Also if other countries start to see recovery that could presumably help boost economic recovery in the US.

Either way I agree with the overall point about political capital being expended and yet I can’t help but think having two seperate stimulus would better from a policy view than one, surely the option to analyse the impact of the first after 8 months could see a more pinpoint second stimulus?