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Home Publications Blogs Beat the Press Effectiveness of the Stimulus: Washington Post Has Not Heard of the Congressional Budget Office

Effectiveness of the Stimulus: Washington Post Has Not Heard of the Congressional Budget Office

Thursday, 02 September 2010 04:37

Apparently word of CBO's existence has not made its way to Fox on 15th Street. How else can we explain the Post's failure to mention CBO's analysis of the impact of the stimulus in an article reporting on a speech by Christine Romer, President Obama's departing chief economist?

The article reported Romer's view that the stimulus helped keep the economy from sliding into a depression and that additional stimulus would boost growth. It then tells readers that Republicans oppose additional stimulus and "argue that Democrats have run up record budget deficits without improving the economy."

This is where a serious newspaper would report the assessment of the stimulus by independent analysts, most obviously CBO. In an analysis released last month CBO estimated that the stimulus increased output by between 1.7  percent and 4.5 percent. It also calculated that the stimulus lowered the unemployment rate by between 0.8 and 1.7 percentage points. In other words, the CBO estimates imply that unemployment would be between 10.3 percent and 11.2 percent today without the stimulus. This would have been useful information to provide readers.

Comments (4)Add Comment
written by izzatzo, September 02, 2010 6:26
I know the stimulus doesn't work because I had teabagger training to prove it. One time we did an experiment to see if adding 10% more fire trucks resulted in less fires but there were still more fires. The fact that fires were growing at 20% had nothing to do with it.
Montgomery Misreports, the WPost Omits Facts
written by Greg, September 02, 2010 1:12
Yet another example of how the WPost doesn't inform readers. The editors at the WPost are determined to drive the "deficit" theme in every political story no matter what the facts are.

Montgomery writes: "Romer, a macroeconomist and expert on the Great Depression, has made no secret of her opinion that more federal spending is needed to prevent high unemployment from becoming a permanent condition."

The next paragraph could have easily provided facts to refute or support Romer's opinion. Facts are usually what informed citizens and leaders need in order to form opinions in public discourse and debate. But not if you are a journalist or editor at the WPost. Aside from Baker's CBO report for confirmation, Romer provides various data to support her argument, but the WPost decides not to print them as well.

Baker's nails the WPost .... again. The Montgomery piece is almost as dreadful as Dana Milbank's coverage of the same speech. Milbank makes no mention of this comment by Romer: “...before the Recovery Act was passed, unemployment was already over 8 percent; and by June, before the Recovery Act could have had much of an impact, it was 91?2 percent. That is, our projection turned out to be wrong even before the Recovery Act had a chance to get off the ground, which is about as clear-cut evidence as one could imagine that the problem was in our assessment of the baseline, and not in the effects of the Act.”

The stimulus worked, it just needed to be larger. Here's Romer's speech, see for yourself. There is no political will because the WPost refuses to print basic facts, in turn, our whole debate in Washington is stilted and chloroformed. http://www.whitehouse.gov/site...s-Club.pdf
written by Paul, September 02, 2010 4:15
The stimulus didn't work because most of it consisted of tax cuts (meaningless in a Paradox of Thrift) and infrastructure projects that were anything but "shovel-ready".

The only thing that truly worked was the direct consumer stimulus program, Cash-4-Clunkers, and that was quickly abandoned after spending a measly $3B. The auto industry managed to recover somewhat anyway and is now hiring workers at good wages, but since reducing unemployment has never been a priority for Obama, nobody cares about what works.
written by urban legend, September 02, 2010 4:42
Unfortunately, those CBO estimates are so wildly different as to undermine its credibility severely. "Estimated" between 1.7 and 4.5 per cent? How can anyone take that seriously? Maybe professional economists understand its meaning, but politically it's a loser. It's typical of liberals not to get that.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.