The Stimulus Has Been Working

Ken AshfordEconomy & Jobs & DeficitLeave a Comment

17leonhardt_graphic-popup Republicans, including the Scott Brown of Massachusetts, are claiming right and left that Obama's stimulus just didn't work.  (Brown is making the incredible claim that it didn't create "a single job").

David Leonhardt of the New York Times puts this meme to rest (not that it won't change the GOP message) in a thorough and compelling way:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Yes, unemployment is still high.  But that doesn't mean the stimulus failed.  It just means we avoided another Great Depression, which is what it was designed to do. 

Republican hacks like to sputter the same tired line, i.e., "but but but the unemployment rate continued to go up after the stimulus package was put in place".  Well, of course it did.  It wasn't like unemployment was going to turn on a dime, especially since ALL the stimulus money wasn't spend right away (in fact, most of it still hasn't been spent).  But more importantly, the point of the stimulus wasn't designed to turn the unemployment rate around, but merely to keep it from going to astronomical rates (15% and 20%).  To actually turn it around, the stimulus would have to have been twice as big, and nobody (save Paul Krugman and a few others) had the political stomach for that.

You don't take aspirin and immediately feel better and start tapdancing on the ceiling.  Republicans are grasping at straws when they try to argue that the stimulus was a faillure, when clearly — VERY clearly — it stemmed the flow of joblessness and drove the economy back from the brink.

The other Republican talking point is that there were flaws and mismanagement and misreporting with the stimulus package.  All true, and not entirely unexpected when it comes from a massive government program (NASA, I believe, has had its setbacks too, as well as every war every faught). 

But these, however, were isolated incidents (often exaggerated) which don't negate the overall economic picture (as indiciated by the graphs at he left, all from nonpartisan economic sources).  In any event, just because the stimulus did not work as well as the Obama Administration predicted, doesn't mean it failed to work at all.