Basic econ and it doesn’t take a genius to figure it out. Mr. Welch’s argument is seductively simple at first glance, but anything more than a superficial look at it shows that it is painfully ignorant of the bigger picture.

Any questions?

It is highly unlikely that Obama Administration’s plans will reduce unemployment. Cutting the Payroll tax, reduces cost of employment to employees and increases income to employees and is direct stimulus. Reducing cost of employing people may well increase employment more quickly than bank bailouts and government takeover of GM, Chrylser, GMAC, AIG, Citigroup.

I disagree with everything he posted.

Assuming for the sake of logical discussion that one of the Administration’s arguments for the stimulus was incorrect (i.e., that the unmployment rate would not exceed 9%), it does not necessarily mean that the stimulus has failed. Rather, it would be one of the arguments made which failed. If the stimulus has kept the unemployment rate below where it would have gone without the stimulus, the program was a success.

As much as you hope that the stimulus fails for your own selfish political reasons — our country and those poor suckers who have lost their job be damned — there is no way of knowing what the unemployment rate would be without the stimulus. I, for one, applaud the Obama administration for at least making an effort to help create jobs instead of merely crying that “the sky is falling and it’s the Democrats fault”.

I wish the Republicans would put their talent and effort into trying to improve the stimulus program, instaed of spending all of their time criticizing it amd hoping that it doesn’t create jobs. It’s a sad state of affairs when the Republican Party would rather see people be unemployed just so they can discover a political issue for themselves.

Some day, perhaps, the Republican Party actually will try to do something positive and beneficial for the country and for Americans.

“government has never proven itself able to manage ANYTHING” Really?? Are you calling for a dismantling of the military?

Jay-
Ironically, it was Republicans who were against the bill having too much pork, that added pork for their districts.

ChescoTom-
I found the chart on FactCheck. It was from a study completely January 9th, 2009, before they had the full picture of the 4th quarter of 2008. The author of the study, Bernstein, gave the following explanation:

“Well, first of all, let’s be very clear about this point. Our forecast at that time was right in the middle of every other forecast, and in fact, if we had had a forecast that was much worse than that, we would have been an outlier. We also would have been correct, it turned out. But the point is that the contraction of the economy in the fourth quarter – you should recall back then that was – the magnitude of that contraction was far larger than was expected. And so at the time our forecast seemed reasonable. Now, looking back, it was clearly too optimistic.

What I will say, though, and I don’t want to lose sight of this, is that the American Recovery and Reinvestment Act, in our view, according to our analysis, will lead to an unemployment rate by the end of next year of 1.5 to 2 points lower than would otherwise be the case. And that is the direct result of the kinds of programs and projects we’re talking about today, putting literally millions of people back to work who in the absence of this program would not be getting fully employed.”

The chart was out-of-date the minute the 4th quarter numbers were released. Though the chart wasn’t revised, Bernstein’s point remains that the job losses would have been higher without the stimulus.
That they went with an estimate that was is the middle of the various projections at the time, goes against the argument that they oversold the plan. Projections that wound up matching what actually happened were outliers, considering that the 4th quarter was not known to be as bad as it was.

Factcheck.org also stated: “So Bernstein is sticking to the prediction that unemployment will be substantially lower with the stimulus bill than without. On that point there’s good economic theory to support him.”

I do agree that a recovery does not happen overnight. It takes time. However, the original chart and the words of the administration seemed to indicate that without this bill things would be immediately worse off. Instead, we have the stimulus and things are much worse than if there had been no stimulus according to their own numbers. Maybe they should pull a mea cupla like Joe Sestak and admit that they were wrong. Instead they stand to be judged as a failure based on their own metrics.

Its too bad we didn’t have a more thorough debate about the stimulus prior to its passage. Perhaps we could have hashed these issues out beforehand… but then again transparency is an oft-overlooked casualty in this administration.

Keep up the good work Steve.