NYT: New Consensus Sees Stimulus Package as Working

Once I built a railroad, I made it run, made it race against time.
Once I built a railroad; now it's done. Brother, can you spare a dime?
Once I built a tower, up to the sun, brick, and rivet, and lime;
Once I built a tower, now it's done. Brother, can you spare a dime?

Forget about the Great Recession. Pay no heed to home foreclosures. Ignore double digit unemployment.

The stimulus package is working! That is thrust of a New York Times article written from the alternate economic universe. Here is the happy face appraisal of the stimulus package presented by Times writers Jackie Calmes and Michael Cooper who counter the criticism of that program with this gem:

But with roughly a quarter of the stimulus money out the door after nine months, the accumulation of hard data and real-life experience has allowed more dispassionate analysts to reach a consensus that the stimulus package, messy as it is, is working.

Unemployment? Not to worry. President Obama is "roughly on track" to solve this problem next year with his magic wand:

The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr. Obama’s promise to “save or create” about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.

What you think of as a poor economic program is mostly an illusion because without the stimulus package things would have been much worse according to one economist:

“It was worth doing — it’s made a difference,” said Nigel Gault, chief economist at IHS Global Insight, a financial forecasting and analysis group based in Lexington, Mass.

Mr. Gault added: “I don’t think it’s right to look at it by saying, ‘Well, the economy is still doing extremely badly, therefore the stimulus didn’t work.’ I’m afraid the answer is, yes, we did badly but we would have done even worse without the stimulus.”

Worse? Well check the unemployment graph below.  The light blue line represents projections made by the Obama economic team early this year about where the unemployment rate would go without their stimulus package. The dark blue line represents where the same team predicted the unemployment rate would go with their stimulus package. And, oops, those nasty red dots represent where the unemployment rate actually went. Note that with the stimulus package the October unemployment rate should have been just under 8% which would have been great. Unfortunately the red dot of reality shows that the October unemployment rate ended up at 10.2%, the first double digit unemployment rate in over 25 years.

And any failure of the stimulus package is due to...Republicans. I kid you not:

Even the $787 billion price tag overstates the plan’s stimulus value given changes made in Congress, economists say. Nearly a tenth of the package, $70 billion, comes from a provision adjusting the alternative minimum tax so it does not hit middle-income taxpayers this year. That routine fix, which would do nothing to stimulate the economy, was added in part to seek Republican votes. But to keep the package’s overall cost down, provisions that would stimulate the economy — like aid to revenue-starved states and infrastructure projects — got less as a result.

Bad Republicans! Whatever the failure in Obama's beautiful stimulus package, it's your fault because we had to placate you. Bad Republicans!

However, despite those wascally Wepublicans, the stimulus is working just fine according to economist Mark Zandi:

Even so, “the stimulus is doing what it was supposed to do — it is contributing to ending the recession,” he added, citing the economy’s third-quarter expansion by a 3.5 percent seasonally adjusted annual rate. “In my view, without the stimulus, G.D.P. would still be negative and unemployment would be firmly over 11 percent. And there are a little over 1.1 million more jobs out there as of October than would have been out there without the stimulus.”

But what of that inconvenient chart showing unemployment with and without the stimulus plus the unfortunate results of what actually happened, Mark? Eh, never mind. Why interrupt him with the inconvenient truth when he is on an alternate reality comedy roll? 

And as to the unemployment charts showing Obama unemployment claims versus brutal reality, the Times writers sound annoyed with Republicans for even bringing up that ugly truth:

Politically, however, the president is saddled with his original claim that, with the stimulus, the jobless rate would peak at 8.1 percent — a miscalculation that Republicans constantly recall. While the administration has said its economic assumptions were in line with private forecasts, most of which also underestimated the recession’s punch, it was more optimistic than most.

Oh, just a "miscalculation?" And will you Republicans quit bringing this up? He made a bit of a mistake and you guys just keep pointing out what actually happened with unemployment. No fair! Plus it keeps people from focusing on just how wonderful the stimulus package is:

Christina D. Romer, chairwoman of Mr. Obama’s Council of Economic Advisers, said attention to that too-rosy projection “prevents people from focusing on the positive impact of the fiscal stimulus. So of course I find that frustrating.”

And now for one last slam at those nasty Republicans who caused a blemish on what would have otherwise been a perfect stimulus package:

...most temporary tax cuts cost more than the stimulus they provide, according to research by Moody’s. That is true of two tax breaks in the stimulus law that Congress, pressed by industry lobbyists, recently extended and sweetened — a tax credit for homebuyers (90 cents of stimulus for each dollar of tax subsidy) and extra deductions for businesses’ net operating losses (21 cents).

Economists said Republicans’ recent proposals to rescind unspent money would be a mistake.

Yecch! Giving money back to the taxpayers? What a horrible idea!

Bad Republicans! We're going to slap you over the head with a newspaper and stick your noses into the economic mess you made this year. Your fault! Bad Republicans! Bad!

Stimulus New York Times

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