Whole Reason

Judg­ing the suc­cess or fail­ure of the stim­u­lus spend­ing has always been a dif­fi­cult task. To eval­u­ate it, you have to deter­mine what would or could have hap­pened had it not been imple­mented. That uncer­tainty allows both sides to play up the issue. The admin­is­tra­tion can say things would have been worse. The GOP can say things would have been bet­ter. It would seem a gen­er­ous way to judge the stim­u­lus’ impact would be to eval­u­ate it in terms of Obama’s own projections.

In Jan­u­ary, President-elect Obama said that unless dras­tic action was not taken (more stim­u­lus spend­ing) “we could see a much deeper
eco­nomic down­turn that could lead to double-digit
unem­ploy­ment10% before the end of the year.

Some­times, politi­cians say things and the math is a lit­tle fuzzy. It isn’t always fair to hold a politi­cian to a state­ment like that. Per­haps his eco­nomic team’s pro­jec­tions will paint a bet­ter pic­ture for the stim­u­lus’ effect. They pre­pared a chart that shows the pro­jec­tions of unem­ploy­ment with the stim­u­lus and if we did noth­ing. This came directly from Romer-Bernstein study (pdf).

So how does that shape up with actual unem­ploy­ment num­bers so far? Here’s a chart from Inno­cent Bystan­dards jux­ta­pos­ing the admin­is­tra­tion pre­dic­tions with the real rate growth.

FactCheck.org ver­i­fied the num­bers in the chart and also gives the Obama admin­is­tra­tion expla­na­tion, which boils down to “It’s Bush’s fault.” (Isn’t every­thing?) They also say that unem­ploy­ment would be even worse with­out the spend­ing, but as FactCheck.org says, there is “no way to prove or dis­prove such a
claim. What we can say is that in the three months after the stim­u­lus
bill was signed Feb. 18, the econ­omy lost more than 1.5 mil­lion jobs,
accord­ing to the BLS. So even if the president’s 150,000-jobs [cre­ated or saved] claim is
cor­rect, that’s about 10 per­cent of the total jobs lost.”