Saturday, October 3, 2009
Is the Stimulous Working?
The above graph from http:innocentbystanders.net shows the projections from the president's economic team forecast in January purporting to show the impact of passing the economic stimulus plan. As you can see, the outcome so far is significantly worse than forecast, with today's announce of the worst official unemployment rate in 26 years of 9.8%, and 17% when you throw in those settling for part-time jobs or those too discouraged to look for work. To my eye, it is significantly worse than the original forecast for doing nothing. Sooner or later, this data will surely be used by politicians in arguments justifying a second round of stimulus. While this data will also be used by critics of the original stimulus to prove that it was nothing but wasteful, pork barrel spending, and not targeted sharply enough in areas of the economy that would be stimulative. I'm sure the administration and their economic team will claim the baseline was significant worse than they thought and the stimulus is working as designed.
For an alternative point of view, here is the controversial Peter Schiff: