As Obama continues to get dragged down under the weight of the stimulus and his health-care plan, it’s interesting to consider what might have been. If he’d taken a more modest approach, he’d probably be in a much stronger position right now. He has a colorable case to make that he — along with Bernanke, Bush, et al. — helped save the financial system. There will be an argument forever about to what extent the system needed saving, but by loose political standards Obama has a pretty good case — he took action and things slowly stopped deteriorating. But there is almost no focus on this because the economic argument has been entirely overwhelmed by the stimulus. The stimulus discredits the administration every day the unemployment rate stays above the predicted 8 percent. And it has stoked concerns about the debt and big-spending that are making passing the massive health-care plan more difficult. If that plan goes down, which seems possible though by no means certain, Obama will suffer a major, harmful defeat early in his presidency.

Things would look different if Obama hadn’t been determined to do so much, and spend so much, so quickly. He could have focused on the financial rescue as his major economic initiative, one geared to the important goal of eliminating all possibility of Depression 2.0. He could have gone much smaller (and more bipartisan) on the stimulus and consequently made less grand claims for it, e.g., “This isn’t going to save us from the worst of the recession, but it will help take some of the edge off it.” And he could have introduced more incremental health-care reforms, assuring more bipartisan support and passage. Under this counter-factual, Obama would have a major (if arguable) accomplishment he could put front and center in the form of the financial rescue; he’d have a more defensible stimulus that wouldn’t have stoked a backlash; he’d have solid, though not world-shaking legislative wins on the stimulus and (prospectively) on health care; and his entire administration would have a more centrist, bipartisan cast. Of course, since Obama is an ideologue in a hurry, he chose a different route. He still might manage to pull it off, but, regardless, congressional Democrats seem very likely to pay a price for it next year.

UPDATE: Please note that Jonah made some of these points three minutes before I did.