Editore"s Note
Tilting at Windmills

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May 26, 2010

THE STIMULUS WORKED -- PART MMCXVII.... A few months ago, Sen. Scott Brown (R-Mass.) insisted that the economic recovery effort that prevented a depression "hasn't created one new job." A reporter gave him a chance to clarify, asking, "It didn't create one new job?" The new senator replied, "That's correct."

For Republicans in general, this is simply assumed to be true. Indeed, the standard conservative line is that the stimulus actually hurt the economy.

The evidence to the contrary is so overwhelming, the debate is over.

The $800 billion U.S. stimulus package has had a slightly bigger effect on the U.S. economy than was projected when it was passed more than a year ago, the Congressional Budget Office estimated Tuesday.

Through the first quarter of 2010, the stimulus boosted employment by an estimated 1.3 million to 2.8 million jobs, about a quarter or half million more than projected. Gross domestic product was 1.7 to 4.1 percentage points higher than it would have been without the stimulus, the nonpartisan budget office said.

Similarly, the unemployment would be up to 1.5 percentage points higher in the absence of the stimulus, according to the non-partisan CBO.

Looking ahead, the CBO projects that as many as "3.7 million American jobs could be attributed to the Recovery Act by the end of the September."

There's a word to describe a recovery effort like this: success.

Facing the greatest economic crisis in generations, the nation had two choices early last year: the Democratic stimulus or the Republicans' proposed five-year spending freeze. We're all very fortunate the latter was in the minority.

Steve Benen 9:25 AM Permalink | Trackbacks | Comments (24)

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Comments

Since so much of the stimulus bill was in the form of tax cuts, I guess this means the Republicans aren't in favor of those anymore.

Silly me! Of course they're still in favor of tax cuts, it's just that they don't care one bit if they create jobs. No wonder their track record is... exactly what it is.

Posted by: jon on May 26, 2010 at 9:31 AM | PERMALINK

well, no...as a matter of fact, the stimulus -- thanks in large part to compromises with the Republican party -- was more what Bob Dylan calls a suck-sess.

I dont know if anybody has noticed... it may come as a shock to all the happy campers... but there's double-god damn-digit unemployment...

and the citizenry are constantly being seduced into believing this is the "new normal" for years to come...

the stimulus success is still on the wrong side of a decent society. there's lots more that needs to be done, if the citizenry were more active, geared up on the facts, and systematically weeding the corporatists out of their representational legislative bodies...

Posted by: neill on May 26, 2010 at 9:44 AM | PERMALINK

So the Democrats are going to take 9.5% unemployment to the country this November as success? I wonder how that is going to go?

Posted by: Counterfactual on May 26, 2010 at 9:46 AM | PERMALINK

Have to agree--the stimulus was not a success, in large part because it was too small and too heavily weighted to tax cuts rather than building for tyhe future. The most successful aspects of the program was the aid to states which lead to some decrease in state layoffs. At the end of the day we have $800 billion more debt and at most temporary easing of the suffering by millions of Americans due to the wretched economic policies this country has followed since LBJ.

Posted by: terry on May 26, 2010 at 9:55 AM | PERMALINK

What this country needs is a good bubble to overheat the economy....We're taking suggestions now.

Posted by: John R on May 26, 2010 at 9:56 AM | PERMALINK

So the Democrats are going to take 9.5% unemployment to the country this November as success? I wonder how that is going to go?

Really depends on whether, race by local race, they can pin the economic collapse on the Republicans or not. I've always had my own version of the presidents "keys" meme:

"If you drive a bus off a cliff, and you wake up to hear the EMTs announce they've completed triage and no one else is going to die on the way to the hospital, you don't get bragging rights. And you certainly don't get to drive the ambulance."

Posted by: Midland on May 26, 2010 at 9:56 AM | PERMALINK

All these CBO "numbers"; I'm waiting to hear what Sarah Palin thinks.

Oops- 'thinks' is the wrong word; but I'll be interested in what she SAYS. . .

Posted by: DAY on May 26, 2010 at 9:58 AM | PERMALINK

Stats don't matter - the Republicans won the message war, the bumper sticker mentality beats numbers and nuance every time.

Posted by: Diane on May 26, 2010 at 10:06 AM | PERMALINK
The evidence to the contrary is so overwhelming, the debate is over.

You don't refute theologies with evidence. You refute them with a stake, a pile of kindling, and a box of medieval kitchen matches.

So the Democrats are going to take 9.5% unemployment to the country this November as success? I wonder how that is going to go?

Not well. The people will, it seems, lash out in protest by electing people who won't think their job's done till U3 is where U6 is, and U6 is God knows where. In a democracy, the people eventually get what they want -- right in the junk.

Posted by: Davis X. Machina on May 26, 2010 at 10:06 AM | PERMALINK

"At the end of the day we have $800 billion more debt"

This is, of course, not true. We have higher growth and thus higher revenues because of the stimulus. Almost certainly not enough to completely pay for itself ......but we're one helluva long way from the whole thing being added to the debt.

Posted by: chaboard on May 26, 2010 at 10:26 AM | PERMALINK

If you think a little thing like documentation of facts is going to get in the way of a GOP talking point, you just haven't been paying attention.

In Republican rhetoric, the stimulus created no jobs whatsoever, except for the ones that were created locally that the GOP congresscritter personally takes credit for.

Posted by: biggerbox on May 26, 2010 at 10:33 AM | PERMALINK

Pffff. CBO numbers? You can use facts to prove anything that's even remotely true.

Posted by: jonas on May 26, 2010 at 10:44 AM | PERMALINK

As others have said, the stimulus was too small, and what was in it was not particularly focused toward the real need, which is job creation.

I often think about the hand-wringing and pearl-clutching that went on over the stimulus bill, the time that it took to pass and the back-and-forth.

And then I look at the near-instant, no-questions funding of much larger sums of money to the military, and money for tax cuts to corporations and the rich, and the bailout of the folks who almost sank us all due to nothing but greed.

It's pretty clear that money to help out the middle class is a tooth-and-nail fight, but everything else is easy as pie. We have to get our priorities straight; can we? Or will it take pitchforks and torches ala France? The more we go along this path, the more I think it's the latter.

Posted by: terraformer on May 26, 2010 at 10:48 AM | PERMALINK

There is zero evidence in this CBO report.

It is 100% garbage in garbage out.

Doug Elmendorf admitted this the last time the CBO produced this Congressionaly mandated garbage. Responding to a questioner following a speech, he admitted that the CBOs jobs count "essentially repeating the same exercise" as their initial projections. When asked if this means their jobs projections would have ignored any failures of stimulus spending to perform as CBO predicted, Mr. Elmendorf responded "thats right."

http://www.c-span.org/Watch/Media/2010/03/08/HP/A/30436/CBO+Director+Elmendorf+on+Stimulus+Law+and+the+Economy.aspx

(skip to 38:20)

Posted by: Conn Carroll on May 26, 2010 at 10:50 AM | PERMALINK

"Similarly, the unemployment would be up to 1.5 percentage points higher in the absence of the stimulus, according to the non-partisan CBO.......There's a word to describe a recovery effort like this: success."

WOW. Set off the bottle rockets. FDR would have been yet better had he matched BO's success of 1.5 % in 18 months maybe 2-3% in 3 years. Oh.. wait... FDR reduced unemployment by about 10% in 3 years. Yes.. the base was higher--- and the way to calculate unemployment was different. By FDR rules, BO has maybe reduced unemployment from 14% to 12.5%. Puts him ahead of FDR and Lincoln among great Presidents exhibiting boldness and sagacity.

Posted by: gdb on May 26, 2010 at 11:10 AM | PERMALINK

Ummmm...

http://reason.com/blog/2010/05/26/stimulus-boosters-listen-up-th

Posted by: TomMathers on May 26, 2010 at 11:16 AM | PERMALINK

Steve, Steve, Steve: Don't you know this is about how people feel, about their gut... and if their gut tells them the stimulus didn't work, well, then it didn't work. Besides, FOX fair and balanced confirms it.

Posted by: Hmmmmm on May 26, 2010 at 11:16 AM | PERMALINK

Chaboard, You are absolutely right. The real number is probably more like $650 billion in debt. Still I at least am frustrated that we spent whatever amount of money it is and have relatively little to show for it other than the temporary easing of suffering. Even the out and out boondoggles of the New Deal at least gave us pretty firehydrants and the more substantive things can still be seen in everything from public buildings to National Parks across the country

Posted by: Terry on May 26, 2010 at 12:23 PM | PERMALINK

"Facing the greatest economic crisis in generations, the nation had two choices early last year: the Democratic stimulus or the Republicans' proposed five-year spending freeze."

There was no Democratic stimulus, there was Obama-preemptive-compromise stimulus.

Thanks for getting out the pom-poms for 9.9 percent unemployment.

Posted by: Dan in CA on May 26, 2010 at 12:40 PM | PERMALINK

To all those posters here who are decrying the effects of the stimulus package, I gotta ask:

1. What would you have done differently?

2. How would you have passed your legislation through a Congress mired down by recalcitrant Republicanism? (Please accept my apologies for the redundancy of that last phrase.)

I'm not thrilled with the unemployment figures myself, but I'm pleased that they're not as high as they would've been had Palin and her sidekick been leading the economic recovery efforts.

If you've got any ideas that are proven to work and can actually be implemented, please share them now.

Posted by: Flip Side on May 26, 2010 at 1:26 PM | PERMALINK

Flip side.
1&2.. Made a much stronger push for a larger stimulus package after repeatedly telling the public that the economy was much worse than some thought and that unemployment would go to 12% or higher if nothing was done. BO ostensibly was working on an 8% figure that was obviously low by 1/09. At least try harder. Push from the get go to break the filibuster by a 51% Senate vote. That STILL needs doing.
3. You're happy with "Better than Bush"? I'm not.

Posted by: gdb on May 26, 2010 at 2:04 PM | PERMALINK

It's too early to declare the stimulus a success. We're at the peak of it's effect and we're at 10% unemployment.

If the private sector doesn't pick up the ball then we're back into a slide.

The short and temporary help was just that.. only maybe a little too short and too temporary.

Posted by: Doug on May 26, 2010 at 2:06 PM | PERMALINK

The "conclusion" is based on the assumption that spending X will create Y number of jobs.

They're assuming that the Keynesian multiplier happened without verifying it with real world data.

Nice try, though. Really.

Posted by: RB on May 26, 2010 at 2:32 PM | PERMALINK

gdb, if it were up to me, I'd've doubled or tripled the size of the stimulus and left out all that tax-cut crap. It wasn't up to me, and I don't know that the administration could've passed a stronger stimulus package with the Congress it currently has. Did the administration believe (or at least promote) the wrong projected unemployment figures? Yes. Would getting those numbers right have changed the dynamics of the conversation? Maybe, to an extent, on the Dems' side, but no, not at all on the other side, except to make the Republicans dig in a little further and start spouting even more insane arguments ("Obama's plan will lead to even more lost jobs — he said so himself!"). Unfortunately, insanity seems to be the default mindset in 30-40% of the public these days, and the echo chamber might have been loud enough to turn the stimulus plan into just a wide buffet of tax cuts.

Is Obama perfect? Hell, no; if he were, I wouldn't have voted for Nader. (Yell at me for that all you want; until this country moves to instant runoff voting, I'll continue to vote for the candidate who best reflects my own views. And I'll continue to support your right to disagree with me.) Could the stimulus plan have been stronger? Yes, under different political circumstances. In the circumstances that existed, I don't know that it could have ultimately come out better (and neither do you).

All this is water under the bridge anyway. If we really want to improve things, we need to start pressuring the administration and Congress to enact another stimulus plan. The effects of the first one are about to start petering it, and this economy's too weak to accept that. And you'll be happy to know the unemployment figures are there for all to see.

(P.S. You're NOT happy that he's better than Bush? Please tell me you're not UNHAPPY about that, at least.)

Posted by: Flip Side on May 27, 2010 at 8:11 AM | PERMALINK




 

 

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