Economic stimulus was too small from the start, thanks to GOP
This week marks five years since passage of the American Recovery and Reinvestment Act -- President Obama’s economic stimulus plan -- and it has been either a great success or an abject failure, depending on who is doing the assessment.
Folks at the White House, not surprisingly, are speaking in the affirmative. In a freshly issued report, Obama’s Council of Economic Advisors insists that the stimulus scheme kept the nation from dropping into a second Great Depression and laid the groundwork for recovery from the economic mess left behind by the George W. Bush administration.
Though the road back has been steep and progress slow, Obama’s team notes that the United States is in much better shape than France, Britain and other economic leaders, with only Germany matching the U.S.’ progress.
Among the tangible benefits of the stimulus, the White House lists 2,700 bridges upgraded, 40,000 miles of roads repaired, 700 drinking water systems brought up to federal clean-water standards and high-speed Internet brought to 20,000 community institutions.
The president’s men also claim an average of 1.6 million jobs created or preserved each of the four years following congressional approval of the stimulus bill.
Republicans paint a far bleaker picture. Unemployment remains too high, economic growth is still too low and all the stimulus spending simply added to the country’s debt. House Speaker House John A. Boehner said, “Five years and hundreds of billions of dollars later, millions of families are still asking, ‘Where are the jobs?’”
GOP leaders say what the country really needs is less regulation, less government spending and a green light for the Keystone XL pipeline from the Canadian oil fields to Texas.
Obviously, in political terms, not much has changed in five years. The debate is as it was then -- and pretty much as it was when Franklin D. Roosevelt ran against Herbert Hoover. Conservative Republicans simply do not believe that government should prime the economic pump; Democrats think it is a proven remedy.
So far, the Obama administration gets the better of this argument. Obama’s team has offered some solid numbers to back their claim of moderate success. They refute the Republican contention that it all cost too much by pointing out that funding the stimulus increases the national debt by “less than 0.1 percentage point.” The Republicans, on the other hand, are just spouting tired talking points and old bromides about freeing the elusive “job creators” from regulations and taxation.
One key point being ignored by both sides is that the recovery might have been much more robust had the initial stimulus scheme been followed up by even more stimulus spending. That did not happen because Republican opposition limited the size of the recovery act and guaranteed that it would not have a sequel.
Five years ago, many mainstream economists warned that the stimulus plan was not bold enough and that, as a result, recovery would be slow and long. It certainly appears they have been proved correct, but White House officials are not eager to talk about how much better it could have been if they had fought harder against GOP intransigence, while the Republicans gleefully point fingers at a limping economy that they themselves helped cripple.
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