Two highlights from this morning’s paean to Keynesianism. The second, heralding the stimulus as the greatest program evah, comes from our new colleague Greg Hengler. The first, from MSNBC, finds The One congratulating himself for having saved America from a new depression. Which is awfully sweet, but alas, untrue:
I’m watching Obama claim that it is “largely thanks to the Recovery Act” that the recession didn’t become a depression. I supported the stimulus, and still do. But this claim is ludicrous…
DId the stimulus help? Sure. But Recovery.gov currently has a nifty graphic showing that of ARRA’s $787 billion in budget authority, the government has currently disbursed about $287 billion. You’d have to posit some really remarkable multipliers for the stimulus to think that this prevented us from sliding into the Great Depression…
So the administration is claiming that by spending less than $300 billion, it managed to prevent more than $700 billion in economic decline–in other words, that the multiplier for their spending was higher than two. They’re saying that every dollar they spent increased GDP by more than $2.
What’s amazing to me about his depression claim is that he’s repeating the key political mistake he made in selling the stimulus: Namely, gambling on the fact that he knows precisely how bad the problem is. We’ve all seen the charts at Innocent Bystanders comparing the White House’s post-stimulus projections for unemployment to the actual numbers, but I don’t think most people realize how deeply that mismatch has penetrated among the public. Via Taegan Goddard, see for yourself what the latest NYT poll found:
Six percent. And as David Freddoso notes, the number who say it’ll never create any jobs keeps on creeping up. So between public disappointment, toxic reports about stimulus money being funneled into programs that are actually being slashed, and moronic tin-eared soundbites from Joe Biden about how we totally got our money’s worth from this thing, The One has a major political problem. Under those circumstances, with so much uncertainty, you’d think the last thing he’d want to do is raise expectations again by pronouncing us out of the woods economically, at least as far as a new depression is concerned. But nope — here he is, patting himself on the back. I hope he’s right, but after reading things like this, I’m a lot less confident than he is.
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