From Lizza's piece on Obama:

Summers informed Obama that the government was already spending well beyond its means. Yet in the coming months Obama would have to sign, in addition to a stimulus bill, several pieces of legislation left over from the Bush Administration: a hundred-billion-dollar funding bill for the wars in Afghanistan and Iraq; perhaps three hundred and fifty billion dollars more in funds from Bush’s TARP program, to prop up banks; and a four-hundred-and-ten-billion-dollar spending bill that was stuck in Congress. Obama would need resources to save G.M. and Chrysler, which were close to bankruptcy, and to address the collapsing housing market, which he was told would be hit with five million foreclosures during his first two years in office. Summers cautioned Obama, who had run as a fiscal conservative and attacked his Republican opponent for wanting to raise taxes, that he was about to preside over an explosion of government spending: “This could come as a considerable sticker shock to the American public and the American political system, potentially reducing your ability to pass your agenda and undermining economic confidence at a critical time.”

Obama was told that, regardless of his policies, the deficits would likely be blamed on him in the long run. The forecasts were frightening, and jeopardized his ambitious domestic agenda, which had been based on unrealistic assumptions made during the campaign. “Since January 2007 the medium-term budget deficit has deteriorated by about $250 billion annually,” the memo said. “If your campaign promises were enacted then, based on accurate scoring, the deficit would rise by another $100 billion annually. The consequence would be the largest run-up in the debt since World War II.”

There was an obvious tension between the warning about the extent of the financial crisis, which would require large-scale spending, and the warning about the looming federal budget deficits, which would require fiscal restraint. The tension reflected the competing concerns of two of Obama’s advisers.

Christina Romer, the incoming chairman of the Council of Economic Advisers, drafted the stimulus material. A Berkeley economist, she was new to government. She believed that she had persuaded Summers to raise the stimulus recommendation above the initial estimate, six hundred billion dollars, to something closer to eight hundred billion dollars, but she was frustrated that she wasn’t allowed to present an even larger option. When she had done so in earlier meetings, the incoming chief of staff, Rahm Emanuel, asked her, “What are you smoking?” She was warned that her credibility as an adviser would be damaged if she pushed beyond the consensus recommendation.

Peter Orszag, the incoming budget director, was a relentless advocate of fiscal restraint. He was well known in Washington policy circles as a deficit hawk. Orszag insisted that there were mechanical limits to how much money the government could spend effectively in two years. In the Summers memo, he contributed sections about historic deficits and the need to scale back campaign promises. The Romer-Orszag divide was the start of a rift inside the Administration that continued for the next two years.

Since 2009, some economists have insisted that the stimulus was too small. White House defenders have responded that a larger stimulus would not have moved through Congress. But the Summers memo barely mentioned Congress, noting only that his recommendation of a stimulus above six hundred billion dollars was “an economic judgment that would need to be combined with political judgments about what is feasible."

and

On May 5, 2010, Orszag, Summers, and Phil Schiliro, Obama’s director of legislative affairs, informed the President that he needed to settle the dispute over whether the centerpiece of his economic plan was jobs or the deficit. His aides laid out the history of their indecision, using an automobile as a metaphor. “This year, the Administration has strongly pushed two distinct messages on fiscal policy,” they wrote. The first was “providing more ‘gas’ ” to help the recovery; the second was demonstrating fiscal discipline by cutting spending, or “stepping on the ‘brake.’ ”

Obama had been bold on health care. But, as Summers had noted in a previous memo, there wasn’t enough “bandwidth” to pass many other priorities. Eighteen months into his Presidency, his economic advisers offered him essentially three paths: an ambitious new jobs package that he could personally advocate as an “emergency expenditure”; “a fiscally significant (several hundred billion dollars over ten years) deficit reduction package”; and an array of “new policies that have greater symbolic than deficit-reducing impact.” The ambitious options were seen as impractical. Congress was unwilling to pass “nearly as much fiscal stimulus” as Obama wanted. A deficit-reduction package would be “a very difficult undertaking that would entail resurrecting ideas you rejected in the budget process” and could “engender substantial political opposition, set up members of Congress for hard votes, and, possibly, produce a legislative defeat for the Administration.” Obama decided against both of the more ambitious ideas. He was left with “smaller, more symbolic efforts” that “are less politically risky,” like reforming federal travel and cutting military spending on congressional junkets. “The challenge here is to break through message-wise and convince the media, financial markets, and the public at large that these measures signify real efforts to restrain spending,” Obama’s economic team wrote.

If I had been president I would have discussed only closing the output gap and creating jobs. I wouldn't have talked about deficit-reduction or fiscal discipline.

When FDR went off the gold standard his economics advisers were horrified but he was re-elected twice.