The Stimulus WorkedAs Far As It Went

One of my biggest gripes about the administration is the fact that they have a terrible, hubristic habit of taking premature victory laps. They aren’t alone — the Democratic congress and the Republicans do the same thing. I suppose they worry about not being allowed to take credit at the later date if things don’t work out so they want to insure they get a celebration for their hard work.

One of the earliest examples was the stimulus which has, it turns out, been very successful on its own terms, but falls short of the unfortunate high bar the administration set for it when it extolled it as the (first of many) “greatest” pieces of legislation passed in the last half century. Kevin Drum writes:

According to CBO reports, the stimulus has created 3.5 million jobs and kept unemployment about 1 to 2 percent lower than it otherwise would have been, and apparently it’s accomplished this efficiently and with minimal waste. It’s a testament to what happens when you take good policy seriously.

And the fact that the country considers it a horrible, budget busting failure that did absolutely nothing is a testament to what happens when you fail to take good politics seriously. As Kevin notes, if they had set their projections lower, they would be sitting on a policy success that exceeded expectations. Instead, the self congratulations and the back patting nearly insured that it would fall short. And even more sadly it insured that it would be much harder to come back for more (not that it ever would have been easy.)

And Joseph Stiglitz (along with many other economists) think we desperately need one:

Nobel Prize-winning economist Joseph Stiglitz called for another round of federal stimulus dollars to spur the economy. He spoke Sept. 30 to the Society of American Business Editors and Writers (SABEW) at its Fall Workshop.

“We will see in the next two years the real cost of there not being a second round of stimulus,” he said. “We will see the economy slow down at a very high economic cost.”

I never thought there would be much chance of getting a second bite of the apple because it was clear to me that the GOP would take a nihilistic approach and do everything it could to make things worse. And it was also fairly clear they would make the deficit boogeyman the “cause” of the problems rather than the result. And they succeeded.

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