Ever since the latest jobs report showed that fewer jobs were lost in July than expected, conservatives have been scrambling to claim that the slowing economic freefall has nothing to do with the economic stimulus package. Today, Karl Rove appeared on Fox News and claimed that “a lot of economists” think that the stimulus is actually “retarding” economic growth:
[T]hat’s what a lot of economists are saying. Our stimulus package is retarding the day of growth not accelerating the day of growth.
Actually, economists participating in the latest monthly Bloomberg News survey said that “recovery from the worst recession since the 1930s has begun as President Barack Obama’s fiscal stimulus — derided as insufficient and budget-busting months ago — takes effect“:
The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey. Analysts lifted their estimate for the third quarter by 1.2 percentage points compared with July, the biggest such boost in surveys dating from May 2003.
Analysts say that the stimulus added at least 1 percentage point to economic growth in the second quarter of this year (though the economy still contracted). “The signs of the stimulus are there,” said Allen L. Sinai, chief economist at Decision Economics. “Government — federal, state and local — is helping take the economy from recession to recovery. I think it’s the primary contributor.”
ROVE: Well, I think economists are saying that the recession appears to be on the edge of being over, but we’re gonna have shaky retail sales and we’re gonna have unemployment persist into next year, we’re gonna have unemployment continue to go up. So it’s not going to feel like good economic times — and we aren’t. It just simply means that we’ve stopped declining. We’re plateuing, we may be able to start growing a little bit.
I thought it was interesting, though, notice that the headline in the Wall Street Journal this morning is about growth in Europe, and Germany, and France. Remember when president Obama went to the G8 and said ‘you oughta try you oughta pass a stimulus package like we did?’ And both of them said forget it. Well, their economies are recovering faster than our economy is. And that’s what a lot of economists are saying. Our stimulus package is retarding the day of growth not accelerating the day of growth.