And whether or not there is public support for any particular policy has zero bearing on how effective the policy may be.
As far as government spending as economic stimulus as a policy goes, it’s been standard economic policy for the last 70 plus years. Look how well it worked in Asian countries after the 2008 meltdown, for instance :
Unlike in the west, there is little debate in Asia about how well the stimulus worked. It has been spectacular. Asian output is well above pre-crisis levels. HSBC is predicting growth for Asia ex-Japan of 8.6 per cent this year. Rather than contemplating more stimulus, authorities are trying to cool things down. Banks have been raising interest rates for months. China and others have introduced measures to take the heat out of the housing market. Fears about unemployment have given way to concerns about labour shortages and spiralling wage demands. Thus the question in most of Asia is not whether to remove stimulus, but how fast. Asia is in orthodox territory, balancing well-trodden trade-offs between growth and inflation…
The Republicans got the perfect stimulus. Large enough to complain about how much it cost, but small enough to not get the economy out of its funk. Its a political win for the Republicans.
We can never know what would have happened without a stimulus program. My instincts tell me that unemployment would be higher, but my instincts are Democrat instincts.
I do think there should have been massive increases in government spending and employment, paid for by massive increases in taxation for the rich. That is what ended the Great Depression.
There were never any substantial shovel ready jobs in the bill. It was a wild spending spree with no criteria other than to spend money. If nothing else, we could have had a golden shovel get-er-done fund that accelerated the painfully slow projects we are all experiencing now in orange barrel land.
I don’t see how anyone is winning with this package.
None? Listen to the righties go overboard again and again.
Our infrastructure is a horrible mess. The average bridge in America is 47 years old. They were built to last 50 years.
IIRC, there was food rotting on ships sitting in ports because the banking system had seized up and noone was sure they were ever going to get paid for anything. Right now we are in the midst of a recession but we are no longer at risk of a second even GREATER depression.
Asia has more faith in government than Americans do generally speaking. I suppose it comes from centuries of technocrats effectively running their civilization.
Keep in mind Obama is the first President who was not from the executive branch of government in a while (Bush, Clinton, Reagan, Carter were all Governors; Bush, Johnson and Nixon were Vice Presidents). So it seems to he that he has too much respect for the legislative process, IMO, being solely from the more deliberative bodies of government.
Obama’s stimulus had nothing to do with fixing the initial financial collapse. It was TARP that helped to get the financial system unstuck.
ARRA (the ‘stimulus’) didn’t even pass until February 2009, and the funds didn’t start being distributed in any kind of quantity until Q3-Q4 of 2009. Most of it was unspent well into 2010, at which point the economy was already out of recession.
TARP was passed in October of 2008, and the money went out almost immediately.
The fiscal stimulus did not prevent a depression because the economy was already out of recession without it. There’s not a lot of evidence that the stimulus did much of anything except prop up salaries of government workers and displace the spending states would have made anyway with federal dollars.
The $10 billion wasted on ‘Cash For Clunkers’ probably had a negative effect on the economy, forcing the destruction of many perfectly good used cars and shifting around the distribution of new cars causing supply-chain problems for manufacturers without actually stimulating a whole lot of new car sales.
A new paper shows that the $22 billion dollar Mortgage Tax Credit program was an utter failure:
That made the program more than useless - it made it counterproductive. The existence of the tax credit drove up house prices, making those mortgages more expensive. Then when the credit ended, housing fell by more than it had increased, causing all those new mortgage holders to take it on the chin. And $22 billion dollars was completely wasted.
Face it: The fiscal stimulus failed. It was an $810 billion dollar gamble that has left the U.S. worse off for it having been passed. Even if in some isolated placed it created a few jobs, for it to be even close to neutral in terms of cost to America overall it had to create millions of jobs, and it clearly didn’t. Now that money is mostly spent, so from here on out, the effect of ARRA will be negative for job creation, and the interest on that gamble will cost Americans somewhere between $30 billion and $50 billion in interest every year in perpetuity - that’s money that will have to be raised in taxes or spending cuts - and it’s an amount more than the entire budget of NASA - actually, possibly as much as TWO NASA budgets.
Actually, the hit to the U.S. economy is even worse than that, because ARRA was used to avoid pay cuts and some layoffs in the government sector (at the expense of jobs in the private sector). That means the government is now structurally larger and more expensive than it would be if ARRA didn’t pass. So on top of the cost of ARRA, you have to add in the additional cost of the government bloat it caused.
And again, it did NOT prevent a depression. The economy was already recovering before it was even implemented, and the recession officially ended in June 2009, at which point only a trickle of ARRA funds had been released, and they would have had zero effect on the economy by then.
This is an oversimplification. The fact that the stimulus existed did a great deal to restore confidence in everything from the markets to municipal bonds.
Here’s the unemployment rate in 2009. There’s no decrease after TARP was announced. There’s not even a blip in the data. In fact, the month after TARP was announced unemployment jumped from 8.2% to 8.6%, and continued increasing throughout the year.
There’s just no evidence for this magical phenomenon you describe.
Sure. The Gallup Investor Optimism Index hit an all time low in February 2009, immediately prior to passage of the ARRA. From March 2009 onward, following passage of the Act, it rebounded to normal levels.
ETA: Moving the goalposts much? Two posts ago you were propping up TARP and blaming ARRA for everything. Now you’re apparently blaming both.
