- ‹ previous
- 631 of 2798
- next ›
Did the Stimulus Work?
Josh Bivens of EPI digs into today's second quarter GDP report to try and figure out what effect the stimulus package has had:
Federal government spending grew at an 11% rate in the quarter, adding roughly 0.8% to overall GDP. State and local government spending grew at a 2.4% annual rate, the fastest growth since the middle of 2007. It is clear that the large amount of state aid contained in the ARRA made this growth possible.
Furthermore, real (inflation-adjusted) disposable personal income rose by 3.2% in the quarter, after rising by only 1% in the previous quarter. A large contribution to this increase was made by the Making Work Pay tax credit passed in conjunction with the ARRA.
....The consensus of macroeconomic forecasters is that ARRA contributed roughly 3% to annualized growth rates in the second quarter. This means that absent its effects, economic performance would have resembled that of the previous three quarters, when the economy contracted at an average annual rate of 4.9%.
The argument that the stimulus bill has "failed" because times are still tough has always been dimwitted. There was never any chance that it was going to miraculously end the recession, only that it might make it a little shallower than it otherwise would have been. So far, it appears to have done exactly that.
Evidence that the stimulus
Evidence that the stimulus should have been much larger.
Of course it failed
Rush says so. The last four quarters have been an economic disaster!
Please Kevin. The
Please Kevin. The "stimulus" was sold over and over as a "jolt to the economy" that would "put people back to work." You have may have thought "that it might make it a little shallower than it otherwise would have been" but it sure wasn't sold like that. On the terms on which it was passed, it is a total failure.
Sorry another Brad
Sorry Another Brad, the question is "did the stimulus help the economy?", not "did it match what I thought it was sold as?".
Wait...what?
So Kevin willingly publishes a quote that says that a TAX CUT had the biggest effect? Wait, is hell still hot?
Hard to disagree with Another Brad though. On the terms that this was sold (the big jolt we need!) this was a total disaster, if for no other reason than the implementation. Hardly any of the money has been spent.
I don't understand how you can be so blind to the fact that this was nothing other than the largest pork bill in history; a thank-you-for-the-support-to-help-me-beat-Hillary reach-around. It was never intended to be a jolt at all, nor to help the economy at large.
Another Brad...you are
Another Brad...you are wrong.
So sayeth Obama in February...""My hope is after a difficult year--and this year is going to be a difficult year--that businesses start investing again … consumers start feeling their jobs are stable and safe and start making purchases again..."
Again in January..."It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better. But that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning."
So you would rather it not succeed at all if it doesn't do so in the 6 months you believe it should? Did you expect another 90s boom and the stock market to soar back to the 12,000s by now? The man is a president, not a miricle worker.
What is it with the reading
What is it with the reading comprehension of GOPers and Obama bashers these days?! James2...either you are lying or you have trouble reading. I find that these comments and emails I get bashing every step Obama takes are generally bald face lies. Did you not think someone would read the full article to check your lie?
"This increase in disposable personal incomes did not translate into a sharp boost in consumption spending because the personal savings rate jumped again — rising to 5.2% in the second quarter, up from 4% in the previous quarter. This slippage between personal incomes and consumption spending caused by a rising savings rate makes plain that, instead of focusing on even more tax cuts, it was wise to make sure that much of the ARRA was devoted to direct public investment spending. The public investment spending in the ARRA, while not having a significant impact in the second quarter, will provide an even stronger boost to the economy in quarters to come."
Plain as day...tax cuts would have translated into people putting money in the savings account rather than spending it.
Again, proof that Obama made
Again, proof that Obama made a mistake by negotiating with the GOP and Blue Dogs by adding those cuts into the package, and still not getting one lousy GOP vote. That was stimulus money wasted.
Wrong wrong wrong
Blue Tex: "Plain as day...tax cuts would have translated into people putting money in the savings account rather than spending it."
This is WRONG because the so-called "savings rate increase" is nothing of the sort. It is economist smoke and mirror bullshit. By "savings" they actually mean people "paying down their debts". The "savings rate" is actually people spending extra dollars paying down credit cards and other loans. It does NOT mean people socking money away for a rainy day.
No savings accounts are getting bigger. People's rainy day funds are not being increased. All they are doing is NOT buying things and, instead, using the money to pay off as much of their bills as fast as they can pull it off without starving or getting kicked out to the street to live in a cardboard box.
A tax cut or a direct subsidy would be irrelevant to the outcome: the money doesn't get saved (as humans understand it), it instead goes to Visa, Mastercard, etc, to pay off PAST spending.
The hypocrisy of the
The hypocrisy of the political parties is just stunning. For eight years the liberals, er I mean progressives, let's just say Krugman et al. bemoaned the lack of savings rate and the deficit. Interesting how Bush was crucified for telling people to go shopping after 911 and now we want people to go shopping. And of course deficits were going to ruin us all. Now of course the rats have changed sides on the ship- yes they are all rats- and now my god we don't want people to save and deficits are good.
My favorite saying is "and Eastasia has never been at war with Oceania, Winston!? Good God Orwell was right.
The stimulus has had its effect because of the extension of unemployment benefits to 79 weeks. They run out shortly but will probably be extended again. The problem is that when people think of the Stimulus package they think of "Shovel Ready" projects because that is how it was sold. It was going to put people back to work. Guess the shovel is stuck in the mud because nothing is happening there. But the lap dog liberals, er I mean progressive are so anxious to claim victory that they have to mine the economic data to find something good. The stimulus package has been a dud, it was always going to be a dud. So lets be honest here and agree to say that extending unemployment benefits and the working family tax cuts WERE effective.
Blue Tex, tax cuts were the way to go. Give everyone more money in their paychecks and they will spend it and save it. They spend it immediately on things they want and need. So what if they save 5% of it? The other 95 % gets spent now. And the money that gets saved serves a purpose too, as investment capital for banks to loan out. Your thesis that 'tax cuts would have translated into people putting money into the savings account rather than spending it is" is just plain wrong. People would only have saved a small portion of it.
Transfer payments by the government were up 7% for the last quarter, that is money just flowing from the government to people via unemployment benefits. This is good, we need that but it does nothing to create wealth, permanent jobs.
One other point Blue Tex, most of the tax cuts in the stimulus bill- something like 200B were in patches for the AMT tax so they wouldn't have to deal with it separately in the 2009 and 2010 budgets. The government is never going to collect that money, they just keep putting patches on it from year to year- just the like 27% in Medicare cuts Congress postpones each year. It was dishonest reporting that this was not made clear to the public.
Don't be a lap dog Blue Tex. Use your brain.
Actually the jolt was
Actually the jolt was proposed Republicans with massive tax cuts to business with the thinking they'd hire workers when no one was buying their products. At the time I compared it to giving the patient a dose of meth. Instead we gave the patient antibiotics to ward off infection and put him in physical rehab after the operation last fall to build muscle and bone for the future. We'll be much better off with better roads, bridges, electrical grid, conservation and alternative energy when we come out the other side.
Never meant as a serious argument.
"The argument that the stimulus bill has "failed" because times are still tough has always been dimwitted."
No, the argument was made for political purposes, not as part of an academic exercise.
It was (and is) meant to fool the masses who don't analyze things like we do. And because the initial strength of the Great Recession was seriously underestimated by more than the economic delta the stimulus is providing in "propaganda land" the stimulus failed argument sells.
The difference between logic that works in real analysis, and psuedologic that works for propaganda purposes is immense.
selective memory, anyone?
At roughly $800B over two years, or $400B/year, there is no way anyone paying the slightest bit of attention back in Feb. could have been under the impression that the stimulus package alone was going to, on its own, reverse a steep recession in a $14B economy. Remember folks like Krugman arguing that a larger package was needed? Heck, he still is!
Didn't George W.
just tell us that private enterprise would "lead" the recovery?
James2 Has Reading Comprehension Issues with His Own Writing
"Hard to disagree with Another Brad though. On the terms that this was sold (the big jolt we need!) this was a total disaster, if for no other reason than the implementation. Hardly any of the money has been spent."
"I don't understand how you can be so blind to the fact that this was nothing other than the largest pork bill in history; a thank-you-for-the-support-to-help-me-beat-Hillary reach-around. It was never intended to be a jolt at all, nor to help the economy at large."
And to think that the above two paragraphs were written by the same person in the same post.
Here's a logic exercise for you James2:
If the money was all pork and payola, then why are they taking so much time to document and approve the allocation and implementation of the stimulus money dedicated to specific projects ? Wouldn't it be much easier to do like they did in Iraq and just show up with pizza boxes full of cash ?
Effect != stimulating effect
So Kevin willingly publishes a quote that says that a TAX CUT had the biggest effect?
James2, that had an effect on personal income in a positive direction, BUT, and it's a big but, consumer confidence continues to fall, and the savings rate continues to increase.
Based on those facts, we have to conclude that the increase in personal income has had little stimulative effect on the economy. It doesn't matter if people have more money - it only matters if they are spending it. It has had a salutary effect on the capital reserves of the banks that people are depositing their wages into, so maybe fewer of them will get EATED by the FDIC.
While I think it's good that many people have a slightly bigger cushion in the event of a crisis, I believe the money would have been better spent shoring up unemployment programs and bracing state budgets - every state worker laid off or program cut leads to less money flowing through the economy. Not to mention the 3 trillion of deferred maintenance and repairs that the American Society of Civil Engineers states is needed just to keep our transportation and water/sewer infrastructure working.
Hardly any of the money has
Hardly any of the money has been spent. Looks to me like all the improvement comes from the eight years of Bush deficits/stimuli that were carefully designed to preempt and ameliorate the coming Obama Great Recession. Bush was big on preemption. Extraordinary prescience.
I believe you are asking the
I believe you are asking the wrong question, Kevin.
It's not, "did the stimulus work?" but, "is the stimulus working?"
These things don't work themselves out overnight, or even in a quarter or two. Especially messes like the one we found ourselves in a year ago.
I think by the end of the year you can safely ask in the past tense.
Stimulus
The stimulus has worked because it has not been implemented. Less than 5% has been put into the economy. What we are seeing is American capitalism righting itself like an aircraft with a lot of lift pulling itself out of a dive. In fact, all of this may be a suckers rally.