FINDING SUCCESS ONE YEAR LATER…. With the first anniversary of the stimulus package coming today, there’s going to be a fair amount of analysis on the merits of the economic recovery initiative. A good place to start would be this piece from the NYT‘s David Leonhardt.
Imagine if, one year ago, Congress had passed a stimulus bill that really worked.
Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.
If that had happened, what would the economy look like today?
Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.
Among people who know what they’re talking about, the fact that the stimulus has been successful isn’t even controversial anymore. The leading economic research firms — IHS Global Insight, Macroeconomic Advisers, and Moody’s Economy.com — estimate that the effort has already created as many as 1.8 million jobs, and will create about 2.5 million jobs when all is said and done. As far as the independent Congressional Budget Office is concerned, those are conservative estimates — the CBO believes the stimulus is already responsible for as many as 2.4 million jobs.
Leonhardt describes the skeptics as “misguided,” adding that one can “pick just about any area of the economy” and find evidence of success.
To be sure, the recovery effort should have been bigger and more ambitious. And it would have been, had Senate Republican “moderates” not demanded that the bill be scaled back, offering less assistance to states and local governments — one of the most effective areas of the legislation. As has become apparent, changing bills to generate “bipartisan” support invariably means making the bills worse, and the stimulus, alas, fits this model.
But the Recovery Act was nevertheless instrumental is rescuing the economy from the abyss.
One year ago, we had three choices: approve the Democratic stimulus plan, approve the Republican spending-freeze plan, or do nothing. We can all be deeply thankful President Obama and a Democratic congressional majority were in office at the time, because two of those three options would likely have been cataclysmic for the global economy.
That Republicans still claim any credibility on this issue is literally laughable. Every time they claim the stimulus didn’t work — an argument we’ll no doubt be hearing quite a bit today — the GOP, which was responsible for getting us into this mess in the first place, looks a little more ridiculous.