Via Tim Fernholz, a speech by Council of Economic Advisors Chair Christina Romer in which she vigorously makes the case that the American Recovery and Reinvestment Act is having a positive impact on the economy. I think the clearest way of making the point is in this chart where she disaggregates the contributors to growth:
The role of the Recovery Act is clearest in state and local spending. Sharp falls in revenues and balanced budget requirements have been forcing state and local governments to tighten their belts significantly. But, state and local government spending actually rose at a healthy 2.4% annual rate in the second quarter of 2009. This followed two consecutive quarters of decline, and was the highest growth rate in two years. No one can doubt that the $33 billion of state fiscal relief that has already gone out thanks to the Recovery Act is a key source of this increase.
She also presents comparative international data showing that countries with larger stimuluses have done better relative to pre-existing forecasts. As Tim says, ARRA “is doing exactly what economists thought it would, even if the policy wound up being executed in an economic environment that was much worse than expected.”