Did Obama Make It Worse? What might have been without the stimulus

In: Commentary, Band 132, Heft 2

Abstract

What if the president of the United States had not proposed an $800 billion stimulus plan back in 2009 but one twice as large? That is the question haunting the intellectual left, led by the economist and columnist Paul Krugman, especially since the economy is mired in what might charitably be considered the doldrums. It slowed to a near-total halt in the first quarter of 2011 with a growth rate of 0.4 percent before climbing to a comatose 1.3 percent rate in the second. The what-if debate is not merely an intellectual exercise. It will have some effect on American policy going forward. The American Recovery and Reinvestment Act was Barack Obama's signature achievement in dealing with the most worrisome set of economic conditions since the Great Depression. Economic analysis from the White House credits the Recovery Act with having saved or created between 2.4 million and 3.6 million jobs by the end of March, 2011. But Republicans have a competing argument. Instead of saving us from a Greater Depression, the Obama stimulus (together with his health-care plan and financial reforms) was a two-year waste of precious time and money that may actually have impeded economic growth. Adapted from the source document.