Squaring the Culture

"...and I will make justice the plumb line, and righteousness the level;
then hail will sweep away the refuge of lies,
and the waters will overflow the secret place."
Isaiah 28:17

05/08/2009 (3:40 pm)

How Well Stimulus is Working So Far (Updated)

The following graph, except for the two triangles, was produced by the Obama administration, and published in a document entitled “The Job Impact of the American Recovery and Reinvestment Plan,” released January 10, 2009 (here it is.) It represents what the Obama administrated predicted for the economy if nothing was done, and what it predicted for the economy if the $787 billion stimulus bill was passed.


The two triangles are the actual figures for unemployment for March and April, in the wake of the passage of the stimulus bill. While the curves on the graph are only projections, and it’s at least theoretically possible that the actual unemployment figures would have been far worse than the projections, the actual unemployment figures are running suspiciously close to what was predicted if nothing was done — and we’re just two months into the projections.

Moreover, the Labor Department, when it published it’s March unemployment statistics, made this prediction:

Many analysts don’t expect the housing slide to show signs of stabilizing until the second half of this year. They said layoffs may be at their high point, but that the jobless rate, already at a 25-year high, will keep rising until the middle of 2010.

The jobless rate will keep rising until the middle of 2010 — again, suspiciously similar to the curve that predicted what would happen if nothing was done.

In other words, the most likely explanation at this moment is that the stimulus bill, all $787 billion in government expansion and unheard-of deficit levels that we had to pass so quickly that our elected representatives were not even permitted to read the bill, is doing nothing.

Credit goes to a blog called Innocent Bystanders. The original post is here, and the follow-up with April’s figures is here.

UPDATE 5/14: Ed Morrissey points out something I did not notice: the graph demonstrates that with or without the stimulus, the government thought unemployment would return to about 5% by 2014, and would fall to a few fractions of a percent by 2012. In other words, that nearly $1 trillion in borrowing and spending was proposed entirely to avoid a two-and-a-half-year bubble in unemployment. Even if it had worked, it probably was not worth nearly as much as it cost.

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