Is a 1.7 Percentage Point Decline in the Unemployment Rate Substantial?
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Wednesday, 08 September 2010 04:26 |
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The NYT says it isn't. The context is a discussion of President Obama's new stimulus program. The article tells readers that the word "stimulus,"
"has taken on negative political connotations since the original roughly $800 billion recovery plan and subsequent additions have failed to push unemployment down substantially."
According to the Congressional Budget Office the stimulus has reduced the unemployment rate by between 0.8 and 1.7 percentage points. This clearly was not enough to get the economy back to full employment, but arguably it was still substantial. People would likely view the economy very differently today if the unemployment rate was over 11 percent.
Arguably, the major cause for disenchantment with the stimulus was the fact that it was hugely oversold. The Obama administration badly underestimated the severity of the downturn and claimed that the stimulus would be sufficient to bring about a recovery.
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> with the stimulus was the fact that it
> was hugely oversold.
And that a large part of it was spent on pet projects and pet constituencies, rather than something more useful.
Then again, what else is new? That's what politicians do, we can count on it. Which is why many people who may have approved the idea of a stimulus in the perfect world are not convinced. In the real world we know large part of it is going to be spent on bad projects or simply wasted. Which is why I am not for any stimulus.
Things always work out in the end. The less idiot politicians meddle the better.