Gee, who could have seen this one coming? I know, Paul Krugman.

Stimulus arithmetic (wonkish but important):

Bit by bit we’re getting information on the Obama stimulus plan, enough to start making back-of-the-envelope estimates of impact. The bottom line is this: we’re probably looking at a plan that will shave less than 2 percentage points off the average unemployment rate for the next two years, and possibly quite a lot less. This raises real concerns about whether the incoming administration is lowballing its plans in an attempt to get bipartisan consensus.

[....]

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

Let’s hope I’ve got this wrong.

Looks like Paul was right. It's not Mitch McConnell but Kristol and Hume are basically saying the same thing. And for the record, since Bill Kristol seems to think that it was a terrible thing for the economy for the minimum wage to be increased, I'd like to see him try to live off of it for a year.

Transcript below the fold.

BAIER: Well, that was President Obama on Saturday. So was he hinting there that there could be a second economic stimulus package down the road?

We're back with our panel -- Brit, Mara, Bill and Juan.

Juan, unemployment at 9.8 percent -- do you think that one of the options that he's talking about is a second stimulus package?

WILLIAMS: Not in the short term, Bret. I think what he wants to do now is to try to make sure that, just as you heard him say the credit markets, the banks in specific are more open to doing work with small business, and small business being the engine for employment in the country.

If you look at Wall Street right now, Wall Street's doing pretty good. They didn't have a great week this week, but they're doing pretty much -- for the course of the year, they're on an upward trajectory.

You look at housing starts, it's looking better. You look at corporate mergers, the kind of confidence that would suggest that people are now willing to get back in and take some risks by merging -- that's another positive sign.

The big question has to do with the holidays coming and consumer confidence, and the idea that consumers are not going to spend, and if they don't spend, then small business doesn't hire, the retail outfits and the malls and the like.

And so what the president is saying -- what the White House people are thinking at the moment is let's get the banks to be more aggressive about reaching out to small business.

BAIER: Bill?

KRISTOL: I like it. I like it when liberals like Juan don't mention unemployment but suddenly are big fans of corporate mergers.

WILLIAMS: Hey, hey, hey.

KRISTOL: You know, that sounds -- the president said he's looking for additional options for job creation. He's done nothing for job creation. It's really stunning when step back and think about it.

What has this president proposed, what has Congress passed, that has anything to do with providing incentives for employers to hire instead of just for economic growth? There's been no pro-growth agenda, even though we're in a very steep recession.

And in fact, many of his pieces of legislation have been anti- growth. They increase the minimum wage. Guess what? Teenage jobs fell $300,000 in the -- 300,000 jobs have been lost, teenage jobs, in the last two months ever since that increase in the minimum wage went in, just as economists would predict.

They've got a huge health care plan out there which is a burden on business. They've got a huge cap and trade proposal which is a burden on business.

They did "Cash for Clunkers" which was reported Friday moved auto sales from September to August, and September sales were back as low as they have been all year. It is not a pro-growth administration. And guess what? They're not creating any economic growth.

BAIER: Mara, at 9.8 unemployment -- Alan Greenspan, former Fed chair, says he expects it to go above 10 and stay there for a while. That's a tough environment for somebody like Vice President Biden to continue to tout the stimulus package as working.

LIASSON: I think what -- the White House argument is that it would have been worse, and I think that you can say they might be right, but that's a very politically unsatisfying argument to make, it would have been worse without this.

I do think the president has said he also expects unemployment to go up, possibly above 10 percent. It is a very bad environment going into the 2010 elections.

However, I think when they talk about another stimulus package, they're not talking about one that looks like the first one, with a lot of massive spending. I think they're talking about extending unemployment insurance, some more...

HUME: That's a real job creator.

LIASSON: Well, they're talking about extending the safety net, maybe more tax credits. I cannot imagine that a second round of stimulus is going to be spending. It's going to be tax credits in a variety of forms, including for first-time home buyers. Maybe it would even be for hiring.

HUME: Boy, I certainly hope Mara is right and they don't try another stimulus like the one they did before, because in addition to not being much of a job creator, the very nature of it was such that it was not going to take effect, if it ever took any, for a long time.

And the normal course that's being -- running here, I think the recession will be seen as having ended by now when economists finally look back on this with full 20/20 hindsight, but it is very common in recessions for unemployment to continue to rise even after a recovery has begun. That what seems to be happening here.

The stimulus has done so far very little to stem that, if anything. And the nature of it is, and the size of it is such, and the amount of debt incurred is so great, that the stimulus now acts as a drag on the economy going forward.

So in addition to all the other problems with it, this thing -- the stimulus now is a burden on the economy instead of being a help to it.

BAIER: So...

HUME: And I -- I mean, my sense about it is that, you know, what we're seeing here is the chickens are coming home to roost on one of the worst things Congress has ever done.

BAIER: No political appetite for a second bite at that apple.

HUME: I hope not.