Home About Chat Users Issues Party Candidates Polling Firms Media News Polls Calendar Key Races United States President Senate House Governors International

New User Account
"A comprehensive, collaborative elections resource." 
Email: Password:

  Stay the Stimulus Course
NEWS DETAILS
Parent(s) Issue 
ContributorRP 
Last EditedRP  Aug 11, 2009 06:55pm
Logged 0
CategoryCommentary
AuthorAlan S. Blinder
MediaNewspaper - Washington Post
News DateWednesday, August 12, 2009 12:00:00 AM UTC0:0
DescriptionCritics claim that the stimulus program is running way behind schedule. Is it? Well, no. While the administration certainly made an overly optimistic economic forecast in February, the stimulus bill, at about 5 percent of gross domestic product spread over more than two years, was never going to cure the patient quickly, or on its own. Rather, it was designed to cushion the fall -- as it has.

The simple truth is that even the voracious U.S. government cannot spend $787 billion quickly. Spending from the stimulus legislation is running pretty much in line with what the Congressional Budget Office projected when the bill was passed -- which was 24 percent in fiscal 2009 (which ends Sept. 30) and an additional 50 percent in fiscal 2010, or 74 percent in about 18 months.

These are still early days for a bill Congress passed only six months ago, but the stimulus has already had a notable impact. The average estimate of three private forecasting firms is that the stimulus added about 2 1/2 percentage points to the annualized GDP growth rate in the second quarter. (If that sounds too high, remember it means adding only about 0.6 percent to the level of GDP.) The consensus of the three firms is that the impact on third-quarter growth will be a bit larger. As they say on the farm, that ain't hay.

We are now in the third quarter, when the importance of the stimulus is likely to be even greater. In fact, its estimated growth impact (about 3 percentage points) actually exceeds the consensus forecast for third-quarter growth -- meaning that, according to current expert opinion, the stimulus will account for more than 100 percent of GDP growth this quarter.
Share
ArticleRead Full Article

NEWS
Date Category Headline Article Contributor

DISCUSSION