"Economists: Without Stimulus, Unemployment Would Have Hit 10.8%"
Today, CNN released a pretty discouraging poll revealing that “nearly three out of four Americans think that at least half of the money spent in the federal stimulus plan has been wasted”:
Twenty-one percent of people questioned in the poll say nearly all the money in the stimulus has been wasted, with 24 percent feeling that most money has been wasted and an additional 29 percent saying that about half has been wasted. Twenty-one percent say only a little has been wasted and 4 percent think that no stimulus dollars have been wasted.
This isn’t all that surprising, considering the false claims that conservatives have bandied about for months regarding the stimulus, including Senator-elect Scott Brown’s (R-MA) recent assertion that it “failed to create one new job.” As Steve Benen put it, “Congressional Republicans have invested considerable energy over the last year in trying to convince the country that economic recovery efforts were a mistake.”
But according to a new survey of economists in USA Today, the stimulus has done a lot for unemployment, and, in fact, “the government still needs to do more to breathe life into the economy”:
Unemployment would have hit 10.8% — higher than December’s 10% rate — without Obama’s $787 billion stimulus program, according to the economists’ median estimate. The difference would translate into another 1.2 million lost jobs. But almost two-thirds of the economists said the government should do more to spur job growth.
Discussion about the stimulus has tended to focus on little accounting errors, which miss the big picture, or on faulty analyses that fundamentally distort how the package was designed. But economists have consistently found that the stimulus package is working exactly as it should, and that it is simply too small to counteract the economic crisis.
With the facts so obscured, I agree with the Atlantic’s Derek Thompson that Obama should defend the recovery act in his State of the Union address on Wednesday. “He needs to remind Americans where the stimulus money went, how future stimulus spending will target joblessness even more exactly, and why health care reform fits into the narrative of our long term economic recovery,” Thompson wrote.
Also, as Senate Democrats get around to unveiling their jobs bill, they’d do well to remember that economists think more needs to be done to boost the economy. Yes, Republicans have made it abundantly clear that they want no part of a jobs bill (Sen. Mitch McConnell (R-KY) is continuing the disingenuous practice of purposefully conflating job creation with the bank bailouts), and deficit fearmongering is in vogue at the moment. But high lingering unemployment will translate into an economic and political mess for which the party in power will be blamed. As Matthew Yglesias put it, “you don’t need an economic policy that people approve of, you need an economic policy that produces results people approve of — i.e., growth and jobs.”