Stimulus should have been bigger, but still working.
…with roughly a quarter of the stimulus money out the door after nine months, the accumulation of hard data and real-life experience has allowed more dispassionate analysts to reach a consensus that the stimulus package, messy as it is, is working.
The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr. Obama’s promise to “save or create” about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.
“It was worth doing — it’s made a difference,” said Nigel Gault, chief economist at IHS Global Insight, a financial forecasting and analysis group based in Lexington, Mass.
Mr. Gault added: “I don’t think it’s right to look at it by saying, ‘Well, the economy is still doing extremely badly, therefore the stimulus didn’t work.’ I’m afraid the answer is, yes, we did badly but we would have done even worse without the stimulus.”
In interviews, a broad range of economists said the White House and Congress were right to structure the package as a mix of tax cuts and spending, rather than just tax cuts as Republicans prefer or just spending as many Democrats do. And it is fortuitous, many say, that the money gets doled out over two years — longer for major construction — considering the probable length of the “jobless recovery” under way as wary employers hold off on new hiring.
More:
Among Democrats in the White House and Congress, “there was a considerable amount of hand-wringing that it was too small, and I sympathized with that argument,” said Mark Zandi, chief economist of Moody’s Economy.com and an occasional adviser to lawmakers.
Even so, “the stimulus is doing what it was supposed to do — it is contributing to ending the recession,” he added, citing the economy’s third-quarter expansion by a 3.5 percent seasonally adjusted annual rate. “In my view, without the stimulus, G.D.P. would still be negative and unemployment would be firmly over 11 percent. And there are a little over 1.1 million more jobs out there as of October than would have been out there without the stimulus.”
The article does point out that Obama shouldn’t have projected 8% unemployment max, and that Republicans harp on that constantly (as we well know here, thanks to monkey troll Group2012). But what was their plan to save jobs again? Cut some more taxes? As it is, our unemployment levels can be directly attributed to the stimulus being too small, because of Republican protests.
And we’re supposed to reward them in 2010?
-jb
November 21st, 2009 at 12:40 pm
Liberal excuse making. The unemployment rate is 10.2% and the GDP growth last quarter was largely due to government spending, not private sector investment.
You go ahead and keep those rose colored glasses on….
November 21st, 2009 at 12:48 pm
Once again, you didn’t read the article.
November 21st, 2009 at 1:00 pm
Just because I vehemently disagree with you and your liberal talk piece, does not mean the content of your post was dismissed. Your arrogance is laughable.
Despite what the NY Times says, an increase in food stamp spending for example is NOT stimulus, it’s just more money out of taxpayer pockets. And again, *saved* jobs is a totally made up number. It’s crap.
November 21st, 2009 at 1:05 pm
I didn’t claim you didn’t read the article because you disagreed with me.
I said that because nothing you wrote reflected any knowledge of what the article says.
Given a second chance, you still fail to say anything that actually signals you read or understood the article.
November 21st, 2009 at 1:40 pm
Typical liberal denial of valid points being made.
You’re pathetic jeromy.
Valid points: The unemployment rate is 10.2% and the GDP growth last quarter was largely due to government spending, not private sector investment.
You ignored that. And yes, the article mentioned the unemployment rate. And yes, the article mentioned the GDP.
More valid points: An increase in food stamp spending for example is NOT stimulus, it’s just more money out of taxpayer pockets. And yes, the article mentioned an increase in food stamps.
You’re a liar, a cheat, a fool.
November 21st, 2009 at 2:22 pm
And the article said the unemployment rate would have been much higher and growth would be negative if it weren’t for the stimulus.
But you read the part about food stamps. Great, you selected one single thing out of the article, and then go back to repeating the same things you’ve said before, discounting all good effects from the stimulus, because they were caused by the stimulus.
Is there any chance of you ever becoming educated enough to realize how stupidly circular that reasoning is?
Or to realize how insipidly moronic it is to keep accusing me of ignoring your “valid” points while you blew off the entire article and the economists quoted because it was from the LIBRUL NEW YORK TIMES.
Why do you insist on inflicting your sub-par intelligence on others?
November 21st, 2009 at 9:24 pm
Liberal arrogance must be bliss.
Another half+ million filed first time unemployment claims this week, and jeromy says, “It could have been worse!”
When the unemployment rate hits 10.5% and another 500 million or so folks file unemployment claims, jeromy will still be defending Obama’s stimulus package.
When the GDP comes in under expectations this quarter, jeromy will stil be defending the clueless.
November 21st, 2009 at 11:08 pm
Yes, it would have been worse if we’d been listening to Republicans. It would have been better if we’d not listened to you at all.
If you did actually read the article (which I still see little evidence of beyond a cursory skimming) you don’t seem to understand it at all. A range of analysts are pointing out how the stimulus has been working, the very thing you’ve been trying to argue against all this time.
You’ve been unable to respond to any of it. You’re just repeating “things are still bad!” like it’s supposed to be an indictment of Obama and the Democrats. Anybody tries to explain anything to you, and you just keep screaming BUT THE NUMBERS ARE BAD LIBERAL LUNACY!
What was your solution to the recession again? Let the banks crash and cut some more taxes? Scrap “unconstitutional” Medicare?
Can you rise above the level of a parrot?
November 22nd, 2009 at 5:38 am
So letting the banks and businesses that are deep in the red crash would have been the worst thing that could’ve possibly happened?
The guy who called this entire thing, Peter Schiff, advised doing just that. Peter isn’t the only one there many others who called the recession and they feel the same way, but he was the one who called on to the media and laughed at on a weekly basis.
I guess it’s just hard to imagine that an over extension of credit can be a bad thing.
November 22nd, 2009 at 10:37 am
Undeniable: The *stimulus* bill left us with the highest unemployment in 26 years, and it’s not *done* yet.
To be a liberal is to be a horse with blinders on.
November 22nd, 2009 at 11:23 am
Group: No, of course it’s deniable. The article makes it quite clear that the stimulus has helped, and that unemployment and growth would be much worse without it.
You have been given reality, and you make statements flatly contradicting it based on nothing other than your own insane partisan rambling. To state that our unemployment levels have been caused by the stimulus is the complete opposite of the truth.
And since you have no excuse for not reading or addressing the actual substance of the article at this point, that makes you a proven, verifiable liar.
November 22nd, 2009 at 11:45 am
Anon: I’ll give credit to Schiff for predicting that crash. In fact, we’ve given credit to him twice on this blog for that prediction.
Pretty brutal takedowns of Schiff’s overall record of predictions and some of his wackier theories:
http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html
http://seekingalpha.com/article/122128-four-reasons-peter-schiff-is-wrong
He’s lost his clients a lot of money betting that the U.S. will turn into Zimbabwe. We’ll see if we’re printing 100 trillion dollar bills soon enough, I guess.
Of course, others predicted the crash too, like Krugman and Roubini.
And they’ve actually incorporated the history of recessions and depressions worldwide into their analysis. Where the government didn’t react, economies worsened and recessions expanded. Where the government reacted quickly to fortify its financial institutions and stimulate the economy, recessions ended much quicker.
By the books, we’re not even in a recession anymore. The government reacted quickly and did a lot to calm the markets. We haven’t reinvented the wheel yet, and these “too big to fail” institutions have some serious regulation ahead so they can’t risk the entire country’s health again, but so far our recovery parallels a number of others in the past. Unemployment lingers, as we know, but the stimulus has helped it from being worse, and further measures are expected within the next year.
We all remember the name of the one who dallied and left the economy to its own means: Hoover.
November 22nd, 2009 at 7:45 pm
That last part you said isn’t true.
Hoover was an interventionist just like Bush became an interventionist. He did everything in his power short of directly putting the hand of government into the private sector to keep the economy from collapsing and it still failed. Roosevelt even ran on a platform criticizing Hoover for how much he intervened.
Despite the fact that Roosevelt was critical of Hoover practically every plan in the New Deal was built upon Hoover’s former plans that were put in motion.
Now, when Harding came into office he actually did have a recession that was worse than the Great Depression however he didn’t do a thing except cut spending and let credit inevitably tighten. The economy was back to being normal in a year or less. Coolidge’s presidency was more of the same and he managed to keep the US the dominant player in the world by not doing anything.
If I remember correctly, Krugman was once asked about the 1920-1921 recession and said he didn’t know how the country recovered so quickly considering that the government spent no money to help with the recovery.
Japan recently had a Great Depression era and they still haven’t fully recovered. Know what they did? They had massive public works and they blew out their spending putting themselves deep into the red. They still haven’t recovered fully.
Schiff has lost his clients money, but at the same time compared to how much money he has made them it’s not as drastic as his critics would have it sound. I think he’s right about the hyper inflation that’s coming, but just off by a couple of years considering when you look at the CPI the dollar is only worth three cents now compared to 1913 when it was actually at one dollar.
November 22nd, 2009 at 9:14 pm
“…practically every plan in the New Deal was built upon Hoover’s former plans that were put in motion.”
After Hoover had four years. Again, this reinforces my point.
“He did everything in his power short of directly putting the hand of government into the private sector to keep the economy from collapsing and it still failed.”
Exactly my point. He did everything except actually do something. Raising tariffs, deporting Mexicans and asking people to volunteer didn’t exactly cut the mustard.
Now I really don’t intend to turn this into a debate over the minutae of economics policy, as people with Ph.Ds in the subject still can’t agree on everything. You say Harding did little, but he convened an Unemployment conference that resulted in a lot of stimulus efforts at the state level. Perhaps you’ve got another comeback for that.
But let me direct you back to the article I originally posted. Regardless of what happened in days past, the evidence is pointing to the benefits of the stimulus package, within mere months of its passage (with plenty of time and money left to go). You can claim that we’d undergo some magic slingshot in time if we’d allowed our economy to implode, but you’ve really got precious few on your side.
The adage about a bird in the hand comes to mind. If we lived in a magic land with a hardcore libertarian president, we’d be looking at a nightmare economy. As it is, we’re looking at a relatively stabilized Wall St., with no reason to expect that unemployment won’t peak soon and then begin to drop.
November 22nd, 2009 at 11:25 pm
You do realize that Hoover tried to orchestrate the private sector with the heads of the private sector right? He had the private sector impose their own wage limits and hour limits. He established panel after panel and nothing good came from it. My point being he did everything but dally.
Even for all FDR did nothing good happened. He only extended the depression by 7 years. The war didn’t end it either, it was only when FDR quit meddling in the private sector the year after the war that the US hit record double digit growth. FDR’s own treasury secretary even said in a letter than nothing they did helped and most likely even hindered the economy.
As for Harding if that State stimulus then it’s not that big a deal. It’s the state’s money. The state knows how to use it best.
Keep in mind I’m not advocating for a no government country. We need one when they’re supposed to stay inside their bounds. However, you’re kidding yourself if you think that unemployment is going to get better anytime soon. If more stimulus passes and one person gets to hand it out the stock market won’t recover back to it’s pre-recession level and businesses will put off on hiring people.
A recession is a necessary process in this cycle that have forced the system into. Barely propping up businesses and increasing government spending is only going make it last longer.
November 23rd, 2009 at 1:26 am
Well, Anon, assuming you read the article, understand the analysis, and want to make certain predictions, we will feel free to hold you to them.
You’re saying these economists may be correct about certain temporary improvements, but that the unemployment rate will recover more slowly than other comparable recessions, and that this will be directly attributable to the stimulus.
I say that a slow regrowth is expected, but will generally mirror historical trends, and that the stimulus will still be seen as having been beneficial.
We shall see, but I win this news cycle.
November 23rd, 2009 at 1:28 am
p.s. And feel free to revert to your old handle, Zach…
November 23rd, 2009 at 12:53 pm
Well that was fun while it lasted. How’d you figure that out? I messed something up didn’t I?
All I’m saying is that it’s best to be skeptical in these kinds of moments.
Oh and if you look at the trend the stock market started to go back up and stablize whenever the current Administration prioritized the Healthcare debate and stopped making the economy the big issue.