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Obama Was Not Off on the Effects of the Stimulus, He Was Off on the Severity of the Downturn
The Post misinformed readers this morning by telling them that the 10.2 percent unemployment rate reported for October was a: "was a reminder of how far off they were in their early predictions about the impact of the stimulus bill passed earlier this year."
Actually, the Obama administration, like CBO and most private forecasters, underestimated the severity of the downturn. There is no credible evidence that overestimated the effectiveness of the stimulus. In other words, there is no evidence (or even a credible story) that the unemployment rate would be lower if without the stimulus. There is also no reason to question the fact that the stimulus did in fact lower the unemployment rate by roughly the amount predicted by the Obama administration.
--Dean Baker
COMMENTS (3)
But if WaPo admitted that the Obama Administration underestimated the severity of the downturn, they might be forced to look at stimulus proposals that predicted a more serious crisis, and we couldn't have that.
Posted by: PeonInChief | November 9, 2009 11:19 AM
Another effect of the stimulus is that it keeps the debt bubble inflated. Asset prices, banks, bonusses etc youknow.. As you say often, we don't know their motivations. But I would add, some things are more likely than others.
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