HOW STIMULATING…. Republican critics of the economic recovery efforts, when they’re not taking credit for the money that’s benefiting their state/district, take it as a given that the stimulus “failed.” For the right, it’s a foregone conclusion, hardly worth discussing anymore.
The New York Times reminds us today that “dispassionate analysts” agree that a fair look at the stimulus package shows that it may be “messy” but it’s also “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.
Obviously, a bigger investment would have meant a bigger return. The $787 billion package would have been more ambitious if the Senate operated on majority rule, and even White House economists have conceded that the stimulus bill should have been larger to accommodate the size of the hole in the economy. That aid to states had to be curtailed to bring on GOP votes continues to undermine the effectiveness of the strategy.
But on the whole, we’re talking about a recovery package that saved us from a wholesale economic collapse. Conservative Republicans — who’ve been wrong about every major economic challenge of the last generation — who whine bitterly about the stimulus are, as is usually the case, misguided.
Mark Zandi, chief economist of Moody’s Economy.com and an occasional adviser to lawmakers from both parties, added, “[T]he stimulus is doing what it was supposed to do — it is contributing to ending the recession.” Zandi added that without the recovery bill, the “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.”
Left unsaid is what the economic consequences would have been if we’d listened to congressional Republicans — 95% of whom voted for a truly insane five-year spending freeze at the height of the downturn.
Politically, however, the stimulus has proven problematic — much of the public is convinced it didn’t work, since the economy is still struggling. The more effort the White House invests in explaining reality, the better.