Just The Facts

Rick Newman, On Friday October 22, 2010, 10:11 am EDT
If the goal of the stimulus plan was to reverse the worst recession in 75 years by the time of the next election, then sure, it was a failure. But most mainstream economists believe the stimulus helped end the recession months, and perhaps years, sooner that it would have ended on its own. The nonpartisan Congressional Budget Office says the stimulus plan added significantly to GDP growth and boosted employment by somewhere between 1.4 million and 3.3 million jobs. The problem for Democrats is they made foolish predictions about how the stimulus plan would save the economy, saying, for instance, that unemployment would top out at 8 percent in 2009 and be falling consistently by now. So they set themselves up for failure by creating unrealistic expectations. Economically, however, the stimulus plan was a modest success, and looking back it's not clear that any other ideas at the time would have worked better. The reason the economy still stinks is that we just endured a violent recession plus a financial panic, and a thoroughly trashed economy doesn't heal on a convenient political time-line.