Guido Fawkes wrote yesterday that the US stimulus had failed. In fact, it's created thousands of private-sector jobs and prevented a depression.
Guido Fawkes has long been known for his libertarian economic positions to the right even of George Osborne. Using oxymoronic phrases like “expansionary fiscal contraction” on the Daily Politics, organising the ‘Rally Against Debt‘ with Ukip against the level of government debt attended by barely 200 people, and now taking economic lessons from no greater an authority than George Bush’s sidekick, Karl Rove.
Yesterday, Guido reproduced a graph from Karl Rove’s shady Crossroads GPS organisation seeking to show that the $787 billion US stimulus package had “failed“. The inconvenient truth for Guido is that the stimulus has worked.
The Pulitzer Prize winning New York Times economics columnist, David Leonhardt, looked in detail last year at the criticisms of the American Recovery and Reinvestment Act:
Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative…
Mr Leonhardt goes on to examine the positive impact of the stimulus on keeping “teachers, police officers, health care workers and firefighters employed” as well as leading to a surge in corporate spending. “Pick just about any area of the economy and you come across the stimulus bill’s footprints,” he writes.
Meanwhile, the independent WealthVest Marketing website, carried a story earlier this year detailing that, “Barack Obama created more jobs in one year than George Bush created in eight years“. Since that piece was published in January, a further 908,000 private-sector jobs have been created although after three buoyant months the last set of data earlier this month was more disappointing. Responding to this, economists including Pimco’s founder Bill Gross, are calling for anything but austerity.
The only thing that Rove’s graph does show is that the stimulus has not quite lived up to the initial estimate – published in January 2009 by Obama advisors, Christine Romer and Jared Bernstein – of how many jobs it would “create or save”. This was criticised at the time, by David Leonhardt among others, for being overly ambitious and was arguably a hostage to fortune giving propagandists like Rove and Fawkes ammunition to play with. But it does not detract from the overall impact of the US stimulus.
22 Responses to “US stimulus has been a success”
Guido Fawkes
(1) What were Labour’s market reforms that gave us lower unemployment? Youth unemployment was shamefully higher at the end of Labour’s term than it was at the beginning (and is actually today lower). Unemployment itself was higher at the end of Labour’s term than it was at the beginning. Incredible self-delusion on your part to claim otherwise.
(2) The US porkulus projections were as the chart said, they were not met, the outcomes were worse. You have no empirical basis for your claim that it would have been worse without the stimulus, that is mere conjecture. Given the false projections it is likely to be conjecture which is equally fantastic and plain false. Hard data and theory are too different things. Your theory has been disproved in real-time at the cost of $787 billion to the US taxpayer.
(3) If in 2014/2015 unemployment isn’t lower you will have a case. We shall return to this at that time. You should be aware that expansionary fiscal contractions are the rule, not the exception. Your article implies that this is some kind of untried air fairy theory. Empirically the historical evidence supports the concept.
Rove’s record: “one stolen election” – you mean the one the US body politic, laws and constitution ensured. Not forgetting all the other election campaigns where he kicked Democrat arse.
“The decimation of multilateral foreign policy” – you mean the foreign interventions backed by Nato?
Guantanamo – still being operated for practical reasons by Obama? I actually don’t approve of Gitmo but that is another matter.
As for aligning myself with him, well, I do like right-wing winners. It was just a factual graph to which I deliberately added his name, as the source, as a provocation.
Your prized porkulus failed to achieve the goals it was set, the expansionary fiscal contraction is under way in the UK. Suck it up.
Leon Wolfson
Guido;
Yes, let’s compare fruitcakes and nuclear weapons. Or we COULD compare what happened before your beloved bankers kicked off a crisis, and find that you’re spinning the effects of a banker-caused global recession as being the fault of a single government. Hmm.
No, no, you need to defend the bankers since they’re private and hence by your definition good, got it.
Anarchists Unite
Unemployment is falling because people are spending – i.e. loading debt on themselves with credit cards.
Can anyone else say ‘bubble’?
mr. Sensible
Guido, the fact that Osborne supported Labour’s spending plans until 2008 is one of the things which undermines his economic credibility.
And on the UK economy, what you forgot to mention is that the claimant count has been going up for months, public sector net borrowing was I think something like £17 billion more over the first 2 months of the financial year than the same period last year (so much for eliminating the structural deficit, and retail sails continue to fall. Osborne’s so called expantionary fiscal contraction is hurting but it isn’t working.
BTW Guido, since you said on the Daily Politics that increasing VAT was regressive, do you support Ed Balls’s call for a VAT cut in response to the retail figures?
Guido Fawkes
http://order-order.com/2011/06/16/balls-calls-for-vat-cut-to-boost-consumer-spending/