Is the economic stimulus working? Ask the dog that didn’t bark.
The president’s renewed efforts to get the economy going include a mix of conservative and liberal policies, as we’ve discussed this week. These efforts include proposals to tax the rich, give tax-breaks to companies that invest in new plant and equipment, and spend more tax dollars on roads, railways, and airports. (Scroll down in the right margin for links to this week’s posts on the economic recovery.)
These are just going to be proposals, at least until after the mid-term elections. If there’s agreement on anything in Washington, it’s that Congress doesn’t want to consider any new economic stimulus bills until after the elections are over. This means that our economic recovery rides on the stimulus package that had already been passed and implemented.
Has that package worked so far? The answer appears to be a “yes” from the Congressional Budget Office (CBO). The CBO is an independent nonpartisan agency within the legislative branch. The most recent estimates come from the CBO’s report about the second quarter of calendar 2010:
- Inflation went up somewhere between 1.7% and 4.5%.
- The unemployment rate went down between 0.7 and 1.8 percentage points.
- The number of people employed increase somewhere between 1.4 and 3.3 million.
- The number of full-time-equivalent jobs went up 2.0 million to 4.8 million jobs.
These figures might appear modest. But they don’t convey the biggest impact of the economic stimulus: What could have happened that didn’t. Without the stimulus, many economists say, things would have been far, far worse. Instead of modest improvements, we would have slid into a deep depression.
It’s like the dog that didn’t bark—what didn’t happen is the good news of the stimulus. What do you make of these facts and figures? Do you agree that the stimulus prevented the worst case scenario?
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