Miles Kimball (link from Tyler Cowen; see also Paul Krugman and Noah Smith) writes:
So the fact that Barack did not push for a bigger stimulus package really is an indictment of his economic leadership. According to the reported statement by Larry Summers, it was a political judgement that a bigger stimulus was not politically feasible. I am not at all convinced that a bigger stimulus was politically impossible. It would not have been easy, I’ll grant that, but I was amazed that Barack managed to get Obamacare through. If, instead, Barack had used his political capital and the control the Democrats had over both branches of Congress during his first two years for a bigger stimulus, couldn’t he have done more?
This reminds me of my pet theory (expressed, among other places, in my article, “2010: What Happened?”) that Summers (and, by extension, Obama) had mixed feelings about the stimulus: yes, they wanted to take the economy out of recession, but they didn’t want to do more stimulus than was appropriate. In particular, they didn’t want to overheat the economy in a way that would lead to a mini-boom in 2010 followed by a bust in 2012. They wanted to go Reagan-style (economy goes down, then up, then reelection) not Carter-style (up, then down, then out).
My speculations in this regard are not based on any macroeconomics but rather on my reading of how Summers might have read the political science research of Hibbs (pre-election-year economy predicts the presidential election) and Bartels (Democratic presidents tend to stimulate the economy in years 1 and 2, Republicans in years 3 and 4).
Related to this is my theory that Republicans think like Democrats and Democrats think like Republicans. Republicans opposed the stimulus because they were afraid it would work and allow Obama to essentially buy reelection. Democrats didn’t want too much stimulus because they didn’t think it was sustainable.
Of course this is all an oversimplification but I think there’s something to this view of the political calculations on both sides.