STIMULUS FACTS ARE STUBBORN THINGS…. The American Enterprise Institute is a conservative think tank, which enjoyed very close ties to the Bush White House, and which is not exactly known for its support for the Democratic domestic agenda.
So it was interesting to see the AEI’s economic outlook for 2010 and its analysis of the Obama administration’s recovery package from last year. (via Jon Chait)
The real economy … responded to the massive stimulus but remained heavily dependent on it. In the United States, growth during the second half of 2009 probably averaged about 3 percent. Absent temporary fiscal stimulus and inventory rebuilding, which taken together added about 4 percentage points to U.S. growth, the economy would have contracted at about a 1 percent annual rate during the second half of 2009. [emphasis added]
I realize that Republicans and their most strident allies are entirely convinced that the stimulus didn’t work. I’ve also seen the polls that suggest Americans in general are skeptical about its efficacy.
But among economists, we seem awfully close to complete unanimity that the Democrats’ recovery effort rescued the economy from collapse, created jobs, and generated economic growth that wouldn’t have existed otherwise. Among those who know what they’re talking about, this isn’t even worth debating anymore — it’s simply an obvious truth.
Which is why the politics of the economic debate can be so exasperating. To reiterate a point from a month ago, the Republicans’ track record of uninterrupted failure is rather astounding.
The GOP said the stimulus package would fail to create jobs. We now know the Republicans were wrong.
The GOP said the recovery efforts would fail to generate economic growth. We now know the Republicans were wrong.
The GOP said the stimulus “failed.” We now know the Republicans were wrong.
The GOP said the government should cancel unspent recovery funds. We now know the Republicans were wrong.
The GOP said tax cuts are more effective at stimulating the economy than government spending. We now know the Republicans were wrong.
Had Republicans been in the majority a year ago, the results for the United States and the global economy likely would have been devastating. That GOP officials and their allies continue to pretend otherwise serves as a reminder of just how little role reality can play in our discourse.