New book shows that the stimulus worked - really, really well

[First]

Ramey is a "her" not a "him". Why do you think she was left off the list? Her study discredited Auerbach and Gorodnichenko's study saying "it worked".

Where was it discredited? I don't see any text or quote on that, anywhere.

Is it possible that the author of this blog is biased? Please answer these two questions.

It's irrelevant who linked it and you should know this, since the actual conclusions in the studies aren't affected by someone linking to them on the interwebs months/years later. Leaving out this one study doesn't change the reality.

I think the general consensus is that the stimulus moderately helped our economy for a relatively short period of time. Questions remain whether it actually prolonged the recovery or not. Also, questions remain regarding the long-term economic impact of adding $787B to our debt.

I'm not sure you even know that you agree with me more than disagree with me. The stimulus is consistently labeled a failure by many on the right. Not so in the vast majority of studies on the matter.

 

[First]

lol @ "stimulus was a success" if it was a success why is there still Governmental and Federal Reserve meddling into the economy? Because it wasn't a success and they need to keep moving forward with their idiot plans because you idiots gobble up everything they say. The people who brought it down are the ones telling you everything is OK and you believe them. That makes you gullible.

You support Ron Paul dude. It doesn't get any more fucking gullible than that, lol.

 

[DrewSG3]

For the most part, the stimulus did it's part. The economy was in pure free fall mode and the stimulus stopped and reversed the massive job losses we were experiencing in the first year of Obama's presidency.

 

[werepossum]

For the most part, the stimulus did it's part. The economy was in pure free fall mode and the stimulus stopped and reversed the massive job losses we were experiencing in the first year of Obama's presidency.

Which is as much as any stimulus can reasonably be expected to do - give the economy a bit of breathing room to stop the cycle of employers trying to get ahead of the curve on lay-offs.

 

[waggy]

This ^ is an example of what I'm talking about. Did the stimulus "work"?

WTF knows.

The question cannot be answered until we have specified exactly what it was supposed to achieve.

Fern

even then we can't say. also only real way is to look back on it from a different time period say 10-20 years from now. I don't see how anyone can say if it was a success or failure. to be honest here is a case for both and you can't prove either way.

 

[shira]

You're assuming the projection and estimations were totally wrong. His image clearly shows the stimulus wasn't as effective as it should've been. If you always have a moving target, then your definition of success is messed up.

"Should have been???" Are you claiming that a recovery that matched the 2009 projections was possible?

You seem to be forgetting that in 2009, at the time those projections were made, the then-current analysis by economists indicated that the recession reduced GNP by - iirc - 3%. Subsequent measurements indicate that the correct figure was 5.1%. So, instead of starting at minus 3.0 - as everyone believed in 2009, Obama was actually starting at -5.1. But here you are telling us that the stimulus was not effective because the recovery from - 5.1 "should have been" as good as a recovery from -3.0.

It's like project management. If your team came up with a timeline and then your timeline slips and you start impacting other teams, you've essentially fallen into the red if you look at an RYG chart.

Obviously at this point you need to re-assess and push deadlines out, but it doesn't mean you're ok now that you're on track to your new deadline. People will be pissed, and management will be breathing down your back. Just because you're making progress isn't good enough.

No, it's not like "project management" at all. What it is is operating with imperfect information. But all of this is beside the point. The OP and various other studies conclude that the stimulus stopped the economy's free fall. That's "success" in any fair-minded person's book.

 

[Matt1970]

"Should have been???" Are you claiming that a recovery that matched the 2009 projections was possible?

You seem to be forgetting that in 2009, at the time those projections were made, the then-current analysis by economists indicated that the recession reduced GNP by - iirc - 3%. Subsequent measurements indicate that the correct figure was 5.1%. So, instead of starting at minus 3.0 - as everyone believed in 2009, Obama was actually starting at -5.1. But here you are telling us that the stimulus was not effective because the recovery from - 5.1 "should have been" as good as a recovery from -3.0.
.

You got a link to that other than Wikipedia? All other graphs and data I can find on GDP and GNP drop is right at 3%

 

[shira]

You got a link to that other than Wikipedia? All other graphs and data I can find on GDP and GNP drop is right at 3%

And if I prove my figure to you, are you going to say: "You're correct; Obama was dealing with a recession far worse than anyone thought at the time. And holding him to projections made when everyone believed the recession was much less severe is intellectually dishonest."

Will you say that, or are you just going to respond with more BS?

But here it is, from the horses mouth, the Bureau of Economic Analysis of the Department of Commerce (there was another revision in July that changed the estimate from 5.1% to 4.7%):

http://www.bea.gov/newsreleases/national/gdp/2012/gdp2q12_adv.htm

(See the section "Revisions to the 2009-2011 estimates" - about halfway down, fourth paragraph).

For the period of contraction from the fourth quarter of 2007 to the second quarter of 2009, real GDP decreased at an average annual rate of 3.2 percent; in the previously published estimates, it had decreased 3.5 percent. The cumulative decrease in real GDP (not at an annual rate) was 4.7 percent; in the previously published estimates, the cumulative decrease was 5.1 percent.

 

[Matt1970]

And if I prove my figure to you, are you going to say: "You're correct; Obama was dealing with a recession far worse than anyone thought at the time. And holding him to projections made when everyone believed the recession was much less severe is intellectually dishonest."

Will you say that, or are you just going to respond with more BS?

But here it is, from the horses mouth, the Bureau of Economic Analysis of the Department of Commerce (there was another revision in July that changed the estimate from 5.1% to 4.7%):

http://www.bea.gov/newsreleases/national/gdp/2012/gdp2q12_adv.htm

(See the section "Revisions to the 2009-2011 estimates" - about halfway down, fourth paragraph).

For the period of contraction from the fourth quarter of 2007 to the second quarter of 2009, real
GDP decreased at an average annual rate of 3.2 percent; in the previously published estimates, it had
decreased 3.5 percent. The cumulative decrease in real GDP (not at an annual rate) was 4.7 percent; in
the previously published estimates, the cumulative decrease was 5.1 percent.

Their real number needs adjusting again. GDP at it's peak right before the recession was $14.21 Trillion. It bottomed out at $3.86 Trillion which is a 2.9% drop. By cumulative they must mean the actual drop plus what they assume GDP would have been without the recession. Were they using the cumulative or real GDP number when assessing how bad the recession was before recommending the $800 Billion? Either way Obama told us that it was the nation’s best economists that said the Stimulus would keep us below 8%. What does that say nation’s best economists?

 

[disappoint]

The leading independent economic forecasters - firms like Macroeconomic Advisers, Moody's Economy.com, IHS Global Insight, J.P. Morgan Chase, and Goldman Sachs, as well as the nonpartisan Congressional Budget Office - all agree that the stimuls helped to stop the bleeding, averting a second depression and ending a brutal recession. The Recovery Act wasn't the only government intervenstion that helped stabilize the patient. The Federal Reserve's emergency support for the financial sector...

Oh look it's the crime bosses JP Morgan Chase and Goldman Sachs.

 

[shira]

Their real number needs adjusting again. GDP at it's peak right before the recession was $14.21 Trillion. It bottomed out at $3.86 Trillion which is a 2.9% drop. By cumulative they must mean the actual drop plus what they assume GDP would have been without the recession. Were they using the cumulative or real GDP number when assessing how bad the recession was before recommending the $800 Billion? Either way Obama told us that it was the nation’s best economists that said the Stimulus would keep us below 8%. What does that say nation’s best economists?

It doesn't say anything about the nation's best economists; it says something about economics.

If economics were an exact science, why on earth would the Department of Commerce need to revise it's estimate of the recession's GDP decrease year after year after year? Yet you pretend that if a politician uses the best-available economic data and projections, he's either incompetent or a liar when the projections don't prove to be accurate.