After the Bailout: a $5 Trillion New New Deal?

It’s easy to forget that if Barack Obama is elected, he will almost be certainly have sizable Democratic majorities in both houses. And those folks will be itching to do stuff. Lots of stuff. What will Obama plus Nancy Pelosi plus Harry Reid equal? I think liberal economics writer Robert Kuttner paints a pretty plausible picture of more taxes, more regulation, and more spending. Oodles more. Like $5 trillion. Here are some excerpts of his take on the future economic policy landscape:

1) Direct refinancing for homeowners.

2) Direct government involvement in the management of failing financial institutions that are recapitalized by government money, through something like the Reconstruction Finance Corporations of the Roosevelt era.

3) A transfer tax on stock and bond transactions, both to raise needed revenue and to damp down the kind of speculation that led to the meltdown.

4) Substantial public spending to pull the wider economy out of the hole. Most of that can be raised by surtaxes on the wealthy and by transaction taxes on speculation, but it will also require a temporary increase in public deficits.

5) Raise enough revenue to cover about $700 billion of financial recapitalization in year one, and in years two through eight use the proceeds for public works, infrastructure, good jobs, universal health coverage, expanded pre-kindergarten and child care.