So, with that in mind, how do you feel about the latest idea that's being floated to, um "stimulate" the economy?

Meanwhile, the White House has built on the comments from Obama with a counter-offer: an employer-side payroll tax holiday. Currently, the employee side of the payroll tax has been shaved for 2011 from 6.2% to 4.2%, with the theory that employees will spend the money. But this latest proposal would cut the employer contribution to the payroll tax, which funds Social Security and disability insurance. All money would be repaid to the Social Security trust fund through general revenues.

In an analysis released shortly after the December 2010 tax-cut deal, Deutsche Bank Securities economists Joseph LaVorgna, Carl Riccadonna and Brett Ryan estimated that the employee payroll tax cut would boost gross domestic product this year by an additional 0.7 percentage points.
Targeting the employer side of the payroll tax could both attract Republican support and spur job growth, said Christina Romer, who was Obama's first chairman of the White House's Council of Economic Advisers.

"A cut in the employer side of the payroll tax could absolutely help accelerate job creation," Romer, an economist at the University of California at Berkeley, said in an interview. "In addition to the usual beneficial effect on demand, this tax cut would make hiring less expensive."

[snip]

The payroll tax cut in question may (or may not) be better than nothing, and their macroeconomic impact would depend on size. The two-point reduction in the employee side of the payroll tax from December 2010 cost roughly $112 billion. It was effectively a two percent raise on the first $100,000 of income. The employer-side would cost the government a similar amount if it were, say, two points, but it's unclear where that money would go. Would businesses pocket it or use it as an incentive to hire more? Economists think the latter, but given all the other inducements tried I'm skeptical. It's just as possible that the money will go to keeping people hired, not hiring anyone new. That's not a bad thing but it won't necessarily improve the employment situation.

There's also the danger of continually cannibalizing the payroll tax cut and threatening the Social Security Trust Fund, even if there are assurances that the trust fund would be repaid out of general revenue. Once these reductions start they're very hard to stop.

The critical mass began to collapse when it became apparent that the Obama stimulus wasn't going to be big enough, and Obama revealed that his plan was to start small and go bigger later if that should prove necessary. That was a political failure because there was no chance that congress would accept more stimulus later if the first round of stimulus didn't do the job.

The loss of the House in 2010 was the result of this failure and the Obama presidency has only gone downhill from there. The failure was compounded by his complete refusal to do anything to reform the finance sector, and his abandonment of all efforts to do anything about the housing crisis. (I won't even get into his failures on war and the constitution).

Now Obama is a complete deficit hawk and every member of his original economic team, except Geithner, has departed. There won't be a pivot, as the pivot already took place when he pivoted from weak supporter of a weak stimulus to deficit hawk.