Wednesday, September 2, 2009

Glory Stimulus

As Politico44 wrote, this is "a headline the White House can love."

An article in the Wall Street Journal entitled "U.S. Economy Gets Lift From Stimulus" details the extent to which government programs like the stimulus package (ARRA) and the Fed-administered stress tests of the nation's largest banks have helped not only stablize the contraction of the economy but have added "two to three percentage points to economic growth in the second and third quarters when measured at an annual rate."

The article even highlights a debate within the economic community over--get this--which government program has been most effective at reversing the recession.

The Journal cites Goldman Sachs & Co. economists' predictions of a 3.3% growth rate in the third quarter: "without that extra stimulus, we would be somewhere around zero."

Not all is so rosy of course; the economy still has a long way to go before the White House can even consider waving the recovery flag. But what they can say is this: they moved swiftly to push for the passage of a major and yes, massive economic stimulus plan under a barrage of criticisms of wasteful spending and reckless money-tossing. They did so with the knowledge that the effect of the stimulus package, passed in February, would be delayed, exposing them to further criticism of having passed a useless bill with a $787 million price tag. But having heeded the advice of the world's best economists, President Obama and congressional Democrats knew a large and robust stimulus operation would be the only way to prevent a downward deflationary spiral from sucking all life out of the economy and precipitating a significant, painful, and unprecedentedly large contraction. And they passed such a package over the loud "nos" of the party which helped in many ways to create the economic crisis we were staring down six months ago. Now the Wall Street Journal, ever the critic of the White House, is reporting on signs of economic recovery created by the very program Republicans politicized with vehement and continued opposition. While it's still early, it's beginning to appear like this plan was the right call for the White House and opposing it was the wrong call for the other side.

Step into the rain:

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