One thing I wanted to address on my earlier post on FDR/Obama parallels was that Krugman’s argument — that the New Deal was in fact, not large enough — sounds a bit like neoconservative foreign policy hawks who have derided Bush for not being quite crazy enough in the twilight of his Administration.
In all fairness, I’d think that taken to its logical extreme — which is utterly detached from reality — neoconservative foreign policies probably would work in accomplishing some sort of hegemony. For example, evidence exists that Iran was quite willing to bargain shortly following “Mission Accomplished” in 2003 when neoconservative Pollyannism regarding our military might seemed, well, not so Pollyannish. In reality, the subsequent five years have shown us stretched to our limits, and this school yard vision of talking loudly while swinging a big stick has been proven utterly daft. That said, it seems entirely plausible that were we able to affect stable regime change, foster a legitimate pro-American democracy, and also eradicate terrorism (which incidentally, didn’t exist in any meaningful way until we got there) in a medium sized country over a period of 6 months and at little cost, neoconservative theories might be today vindicated. Obviously, none of these things were possible, but it’s important to note that the theories informing neoconservatism have only been debunked inasmuch they relate to America’s ability to implement them.*
To bring things back to fiscal stimulus, while America may not have the military might to double down on neoconservatism, we do have the economic might to double down on expansionary fiscal policy. What’s more, it’s even been proven to work!
*DISCLAIMER: I’m not mounting a defense of neoconservative foreign policy; as a practical policy, it’s (to use a term preferred by John McCain) laughably naive. If America — who accounts for 48 percent of the world’s military expenditures — cannot successfully implement neoconservative policies, it seems unlikely that anyone can (at least without use of nuclear weapons as an offensive measure). Moreover, it’s not at all clear that a hegemonic role for America would be the least bit desirable. I haven’t given enough thought to what American hegemony would look like, but a simple glance at history shows that empire is an utterly unsustainable enterprise.