It’s A Good Thing We’re Still Talking About The Stimulus
The willful ignorance purveyed by opponents of the economic stimulus package reached laughable heights this week. The haters at the Heritage Foundation even refused to admit that there is an argument that the stimulus might have been successful, whether in boosting GDP or employment or both:
And there is no debate: by any objective measure, President Obama's first stimulus was a complete failure.
Others have thoroughly documented the existence of the very objective measurements of stimulus success the Heritage Foundation calls nonexistent. Despite such denialism, discussion of the stimulus package's successes and failures are by now well chewed over. What has been absent, however, is a discussion of a shift in how policymakers will think about economic stimulus - and, particularly, about economic recovery - in the future.
Writing in The Wall Street Journal on Friday, Gerald Seib notes that:
And, yes, that stimulus package has added some to growth. Perhaps best of all going forward, one of the complaints voiced a year ago by critics of the stimulus - that its big infrastructure projects would take so long to roll out that they wouldn't be of much immediate help on the jobs front - has proved correct. That means there's more in the pipeline to be spent this year than was rolled out last year.
One of the least noted characteristics of the stimulus is its persistence in the economy and in the public consciousness. Contrast this with the Bush stimulus: Does anyone remember that the American Recovery and Reinvestment Act is actually the country's second stimulus? This could in fact be a rare instance of politics outshining pocketbooks: most of us received a check for $600 two years ago and, yet, very few of us discuss its wisdom or call it a success.
The Obama administration's stimulus bill, on the other hand, has been at the forefront of policy debate for over a year, from transportation to health care to job creation to education to clean energy. Thinking cynically, this diversity of investment might simply have been the result of logrolling to get legislators on board. However, the recovery package also stretched its spending over several years: far from being a drive-by stimulus, as Bush's arguably was, ARRA in some sense "foresaw" a prolonged recession in which private sector lending and investment would not return quickly.
Delays in spending - both purposeful and not - might have undercut some of the stimulative impact of ARRA over the last year. But by metering stimulus spending over several years the administration has shifted the paradigm of what economic recovery requires from a brief and temporary infusion of government funds to such an infusion followed by investment over the medium and long term. A bill to stimulate job creation is sorely needed and economic recovery is not yet within reach, but we should be happy that we are still talking about the stimulus.