As a measure of the state of the U.S. economy, the U.S. House of Representatives (last week) passed an $825 billion economic stimulus bill and it may not be big enough.

The stimulus package is expected to grow when it reaches the Senate, and its configuration may change as well. The House package contains about $2.80 in direct spending for every $1 in tax reductions. President Barack Obama is expected to adjust that ratio to attract bipartisan support in the Senate.

But most Republican House members cravenly will vote against the bill anyway, if only for political cover back home. They can do so secure in the knowledge that the package will pass anyway and their Senate colleagues will do the heavy lifting on a final version. In all, the Congressional Budget Office estimates that the stimulus package “would have a noticeable impact on economic growth and employment in the next few years.”

The downside, of course, is that the CBO says budget deficits would increase by $816 billion in the same period, leaving us all to hope that former Vice President Dick Cheney was right in 2002 when he said, “Reagan proved that deficits don’t matter.”

What budget analysts cannot forecast is the psychological effect of the stimulus bill. Confidence is expensive, but whatever the price, it must be paid.

— St. Louis Post-Dispatch, Jan. 28