Political Animal


November 25, 2011 9:35 AM The stimulus worked, redux

By Steve Benen

Most Americans don’t believe the 2009 stimulus worked. Most pundits, like all Republicans, accept the notion that the Recovery Act “failed” as incontrovertible fact.

And then, there’s reality.

The Congressional Budget Office (CBO) said Tuesday that President Obama’s 2009 stimulus package continues to benefit the struggling economy.

The agency said the measure raised gross domestic product by between 0.3 and 1.9 percent in the third quarter of 2011, which ended Sept. 30. The Commerce Department said Tuesday that GDP in that quarter was only 2 percent total.

In other words, weak growth would be non-existent growth were it not for the stimulus.

What’s more, the CBO found there as many as 3.3 million full-time American workers have jobs right now, and otherwise wouldn’t, because of the derided Recovery Act.

Referencing the CBO report, the Center on Budget and Policy Priorities’ Hannah Shaw published this chart earlier in the week:

In case it’s hard to make out the details, the blue line shows the unemployment since the start of the recession, while the high and low estimates of what the unemployment rate would have been had Democrats not intervened with the stimulus.

No one ever wants to hear “it would have been worse,” but in this case, the truth is, it would have been worse. The Recovery Act stopped the bleeding, prevented the collapse of the economy, and at a moment of severe crisis, helped put the United States on stronger economic footing.

Republicans don’t believe this, and they desperately hope you don’t either, but this is no longer in the realm of opinion. It’s just what happened.

I’d also note, by the way, that while this chart shows what would have been had there been no stimulus, what it doesn’t — and probably can’t — show is a fourth line telling us how high unemployment would have gone had the country followed the Republicans’ proposed solution. These details have largely slipped down the memory hole, but in early 2009, with the economy hanging on a cliff, GOP policymakers had a fairly specific agenda to get the economy back on track: a five-year spending freeze and a constitutional amendment requiring balanced budgets.

You may recall, in early March 2009, David Brooks said on national television, “A lot of Republicans up in Capitol Hill right now are calling for a spending freeze in a middle of a recession/depression. That is insane…. [T]hat is just insane.”

But that really was the GOP solution. Those same people who falsely claim the stimulus failed pushed an agenda that would have caused an economic calamity from which there was no recovery.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • Rudy Gonzales on November 25, 2011 9:41 AM:

    The CBO found there as many as 3.3 million full-time American workers have jobs right now, and otherwise wouldn’t, because of the derided Recovery Act and this weak growth would be non-existent growth were it not for the stimulus! The TEA-GOP-Republican elitist do not want to accept that the Recovery Act stopped the bleeding, prevented the collapse of the economy, and at a moment of severe crisis, helped put the United States on stronger economic footing. All career Republican learned early in life politics would be a good source of money and power. He learned early in life to lie his way into office and speak with a forked tongue. His puppeteer, Grover Norquist, controls his every move. Why do the TEA/GOP/Republican leadership shows a greater allegiance towards and for a lobbyist like Grover Norquist, than the American public or economy? The people of his district chose him to lead for everyone in his district, not elitist like Norquist. Every TEA-GOP-Republican, who have signed or pledged to anyone other than their constituents, should be targeted for expulsion from the House or Senate for compromising their fiduciary responsibility to their constituents.

  • c u n d gulag on November 25, 2011 9:47 AM:

    Conservatives aren't 'invested' in helping the country or its people.

    They're 'invested' in helping themselves, people like themselves, and people who can help them.

    It's the world of the 1%ers.

    And politicians know, if they play the game right, when they leave government, there's a cushy job for them at 6 or 7 figures a year, where they can make some money by sucking up to the .0001 or .00001 - the ones with the REAL money.
    They'll still be whores, just better paid ones.*

    My apologies to sex workers everywhere, who really work and earn their money.

  • kevo on November 25, 2011 9:48 AM:

    Yes, Republican politics are stunting our growth, our comity and our attempts to create a more healthy society!

    Romney and the rest of the Republican presidential hopefuls have admitted and shown they are willing to lie, cheat and steal this next election anyway they can. They need to be called out now, early, and often or strange and damaging things will surely happen to our beloved nation should anyone wearing the Republican stripes become our next president!

    Letters to the Editors of our major dailies is a start, and those letters need to condemn vociferously the lying (Romney's TV salvo), cheating (voter ID laws), and Stealing (Citizens' United) that is being embraced, employed, promoted, and sustained by the beast called Republican!

    A vote in 2012 for Republicans is a vote for the death of the American Middle Class! -Kevo

  • stormskies on November 25, 2011 9:52 AM:

    And exactly why is it that 'most' Americans don't 'believe' that this has worked ? It's just yet more evidence of the corrupt corporate media and the invented narratives that cause this to happen ....... and they are paid millions to do so.

  • DeanJ on November 25, 2011 9:57 AM:

    If we can't go back and analyze what would have happened if Republican plan was implemented, perhaps we could have forecasting of what would be happening if Obama's job act would have been implemented--how much growth is being stifled by Republican obstruction?

  • DeanJ on November 25, 2011 9:58 AM:

    If we can't go back and analyze what would have happened if Republican plan was implemented, perhaps we could have forecasting of what would be happening if Obama's job act would have been implemented--how much growth is being stifled by Republican obstruction?

  • l b 2 2 on November 25, 2011 10:36 AM:

    The problem with the stimulus (besides timidity) is that Obama said it would bring unemployment down to 8% (or whatever number it was). This allowed Republicans to treat that number as the measure of success or failure. They can completely ignore the fact that the economy is in considerably better shape than it would be without the stimulus.

  • bigtuna on November 25, 2011 11:08 AM:

    Like many things, the issue of "it could have been worse" points to the lack of basic understanding of econ, finance, science, math, etc. Basically, the null hypothesis in 2009 was do nothing. We all know / suspect what that would have done, and I suspect that an outcome would have been much worse than the projections. But of course, tha tis not what people hear.

    And, yes, Obama should have done more, been more, etc. ... woulda coulda shoulda. I have very distinct memories, however, of the stimulus act having to satisfy some $900 bn cap, arbitrarily imposed by . ... Collins, Specter, Snowe, and Nelson, ± Landreau, no?

    There never were 60 Dem votes to pass it, remember?

    I too long for the days of Lyndon johnson sitting on the crapper calling some pissant congressman or senator and browbeating him/her into voting to make things happen. But that is not how the game is played these days.

  • Anonymous on November 25, 2011 11:29 AM:

    Most Americans don't believe stimulus worked because they feel it didn't work so well for them.

    Yes, it avoided a depression.
    Yes, everyone got pay roll taxes and their money in the banks were saved through unpopular but necessary bank bailouts.
    Yes, many public workers and auto workers could keep their jobs so many Americans could keep their car maintenance and kids in schools.
    Yes, everyone benefits from infrastructure and solar tech investment.

    But stimulus also promised lower unemployment. It is ever so slowly getting lower but as much as it was estimated except for the top earners.
    that needs some explanation from Obama.

    People feel that wall street got a better bargain than main class. WS is doing better in last 3 years while middle classes are doing about the same.
    without stimulus, all of us would have been doing much worse but It feels unfair.

    I think it's partly jealousy and childish selfishness, willful ignorance about our needs for wall street (it needs to be reformed but we can't function without financial institutions).

    but it is understandable that they feel like wall street took their tax money away.

    i think there isn't much obama can do better to educate publics when some people are just unwilling to admit the reality of US economy.

  • dj spellchecka on November 25, 2011 12:00 PM:

    and then there's the alternative reality.....

    here's the washington times headline on the cbo report from tuesday : CBO: Stimulus hurts economy in the long run

    then it gets echoed throughout the wingnutosphere


    the truth is whatever the bubble says it is.....

  • Anonymous on November 25, 2011 12:07 PM:


    The auto industry is a key component of the U.S. economy. Economists used 2007-2008 data to build estimates of what a shutdown would cost in summer 2008, in order to set benchmarks to help policy makers understand the impact of bankruptcies. Such estimates were widely discussed among policy makers in late 2008.[41]

    Closing the Big Three would mean loss of 240,000 very highly-paid jobs at the Big Three,[42] a loss of 980,000 highly-paid jobs at the suppliers and local dealers, plus the loss of 1.7 million additional jobs throughout the economy—a total loss of 3 million jobs.
    Estimates were that a Big Three shutdown would cause a decline in personal income of $151 billion the first year, and $398 billion over three years. The federal, state and local governments would lose tax revenue, and instead spend on welfare programs a total of $156 billion over three years.[43]

    Economist David Wyss of S&P has posited that if GM and Chrysler disappear, there could be an increase of about 1 million imported cars every year, which would remove about $25 billion from the U.S. economy. That would reduce GDP by 0.2 percentage points annually—excluding the impact of lost jobs (higher unemployment) and wages.[44]

  • schtick on November 25, 2011 12:31 PM:

    When a tealiban in a debate or in "town hall" (if they allow people other than the tealiban in), state that the stimulus didn't work, SOMEONE should ask them how much their state asked for and received in stimulus and a have a copy of their request to flaunt in their face when they try to lie their way out of it. (Especially the part where they said it would stimulate the economy in their state as they begged.)
    Now when it comes to Mitty FlipFlop, and Cain Nien(NienNien), it SHOULD be brought to their attention all they have ever done in their life is cut jobs to begin with, so what would they do different to put people to work instead of on unemployment by letting the auto industry go bankrupt or cutting agencies in government which would put people out of work and STAGNATE the economy even worse.
    Will never happen, but what the hell, I can still dream, can't I? I can dream that one of those corporate media whores like Brian Williams, or Gregory, or Wolf, or George would finally grow a pair and ask for real answers to tough questions. Or just maybe OWS might run a MIC on them telling them they always avoid answering questions by stating what others haven't done instead of what THEY would do.

  • Anonymous on November 25, 2011 1:48 PM:

    @dj spellchecka

    that's true.
    without austerity in a few years, stimulus would be hard to justify.
    we need to be careful about this creating another bubble, as well as deficits.

    New Deals are considered good only because of 1950s economic growth with high tax rates to pay for the new programs.

  • nyan on November 25, 2011 1:51 PM:

    but people also need to know that bailouts were mostly paid back and stimulus is half tax cut for everyone, thus creating deficits (though it's smaller deficit compared to the deficits from bush tax cut and 2 wars and housing bust loss)

  • newinfluence28 on November 25, 2011 2:37 PM:

    @dj spellchecka-

    Nice catch. I couldn't believe that would be true!!!

    But then again, it would ruin the narrative to admit that President Obama has been anything but an "abject failure." (A phrase out of the RNC that is parroted by every GOP candidate that can remember it.)

    @l b 22- yes, the Obama team did make that prediction of 8%, but that was before the economy bottomed-out and the real numbers were released. It IS a failure of the White House/DNC that so much misinformation has been allowed to stand. A less cynical person than I might be led to believe that the Obama Administration was more interested in governing and getting us through the mess than battling political lies. But that couldn't POSSIBLY be the case, could it?

  • Jstdafx on November 27, 2011 3:17 PM:

    Interesting discussion. I'm glad you all are satisfied with average. Of course, anyone who believes the bs Ive read here lives and breathes mediocrity which is the most we can expect from another Obama administration. Unless of course you are a member of a union, a "green energy" company, or Federal employee. In that case, you am expect more hand outs and political quid pro quo while the rest of us who pay taxes and do our best to provide jobs for others through running our small business, will continue to pay more, earn less and hire fewer.