September 22nd, 2010
02:52 PM ET
4 years ago

Stimulus: Economists debate its success

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New York (CNNMoney.com) - Did the federal stimulus plan work in fixing the economy?

That was the question confronting the Senate Budget Committee on Wednesday. The senators summoned some of the most renowned economists in the country to seek the answer - but they failed to find common ground.

The economists – Alan Blinder, co-director of the Center for Economic Policy Studies at Princeton University, Mark Zandi, chief economist of Moody's Analytics, and John Taylor, economics professor at Stanford University – took divergent views.

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Filed under: Economy • issues • Stimulus
soundoff (15 Responses)
  1. NYC REPUB

    It worked.

    September 22, 2010 03:00 pm at 3:00 pm |
  2. GOP Scorched Earth Politics

    No big National public works projects FDR style. I would have preferred to see a BIG stimulus project such as a NATIONAL high-speed rail system. Gee Europe and Japan had high-speed rails for only 20+ years.
    America is still stuck in the 1950's thanks to greedy Big Oil lobbyists and their complicit Republican fundamentalists that always are trying to turn back the clock 100 years.

    September 22, 2010 03:03 pm at 3:03 pm |
  3. Bill

    Sure didn't slow down unemployment to 8% or below as promised. According to most of what I have read it is about $2M per job.

    September 22, 2010 03:05 pm at 3:05 pm |
  4. JANUARY 20, 2013 - THE END OF AN ERROR

    Blinder and Zandi are displaying their Liberal/Democrat stripes, again. My contention is that it was the policy of the Federal Reserve (by Ben Bernanke) through various credit facilities and quantitative easing that kept us out of Great Depression II.

    The "stimulus" was no more than the funding of pork barrel projects for the constituencies of Liberal Democrats. REMEMBER, IT WAS PROMOTED BY OBAMA AS THE PROGRAM THAT WOULD KEEP THE UNEMPLOYMENT RATE UNDER 8%!!!! Needless to say it missed that target.

    Oh by the way, the latest projections I am hearing is that the unemployment rate will remain close to 10% until 2012. And that is really bad news for Obama.

    September 22, 2010 03:07 pm at 3:07 pm |
  5. Allen in Hartwell GA

    I think we can forget about manufacturing being the cure-all for our economic woes, unless our wage scale gets a dramatic face lift. As long as manufacturers can have products made for a fraction of what it could cost using American workers, and still charge the same prices at retail, we will not get those jobs back. We have to look for technology that can't be sourced out. Maybe robbing houses of the rich.

    September 22, 2010 03:11 pm at 3:11 pm |
  6. T'SAH from Virginia

    It helped and NO ONE will admit it or BRAG about it (DEMOCRATS) until the history books are written.... Period!!!

    DEMOCRATS need to get out there and BRAG about their accomplishments and RAG on the Party of NO who had NOthing to do with any of it NOW!!

    T'SAH from Virginia – the ONE and ONLY – and I approve this message!!

    September 22, 2010 03:14 pm at 3:14 pm |
  7. DagnyTag

    HEY LIB-NN...WHAT is there to debate??: Over a year after Congress approved $800+ Billion in stimulus funds, Los Angeles city controller Wendy Greuel has released a 40pg report on how the city spent its share, and the results are shocking. And people wonder why everyone is screaming – THROW THEM OUT!!!!!!!

    "I'm disappointed that we've only created or retained 55 jobs after receiving $111 million," said Wendy, the city's controller. "With our local unemployment rate over 12 percent we need to do a better job cutting red tape and putting Angelenos back to work."

    According to the audit, the Los Angeles Department of Public Works spent $70 million in stimulus funds - in return, it created seven private sector jobs and saved seven workers from layoffs. Taxpayer cost per job: $1.5 million.

    The Los Angeles Department of Transportation created even fewer jobs per dollar, spending $40 million but netting just nine jobs. Taxpayer cost per job: $4.4 million.

    Greuel blamed the dismal numbers on several factors:
    1. Bureaucratic red tape: Four highway projects did not even go out to bid until seven months after they were authorized.
    2. Projects that were supposed to be competitively bid in the private sector went instead went to city workers.
    3. Stimulus money was not properly tracked within departments
    4. Both departments could not report the jobs created and retained in a timely fashion..

    "I would say maybe in a grade, a B- in creating the jobs". "They have started to spend those dollars but it took seven months to get some of those contracts out. We think in the city that we should move quickly and not in the same usual bureaucratic ways."

    “B-“?????????????? IS THIS WOMAN ON THIS PLANET?!!!!!!!!!!!!!!!!!!!!!!THIS IS INSANITY!!! “B-“????

    She gets a ‘Z’ for ZERO worth.

    September 22, 2010 03:16 pm at 3:16 pm |
  8. one voice

    For one thing, the stimulus is less than half used and without it we would be in another great depression and unemployment would be over 25%. These projects were here in the U.S. of A, for new roads that have been neglected during the Bush/Cheney Resime. Thank you Mr. President

    September 22, 2010 03:17 pm at 3:17 pm |
  9. Chris

    I think it all depends on what your were expecting from the stimulus.

    If you were expecting the stimulus to prevent another depression the likes of which we have not seen in 80 years, then it worked! I find it hard to argue that it did otherwise, speaking objectivley.

    If you were expecting the stimulus, as sold by the Obama administration, to provide durable LONG TERM growth that not only saw us out of a recession, but kicked our economy into a much different and higher gear then that of stagnation, then it failed (and failed quite miserably).

    Bottom line: The stimulus all revolves around ones expectations.

    September 22, 2010 03:20 pm at 3:20 pm |
  10. one voice

    Lets face it, without the 90 plus filibusters by the RIDICULOUS RIGHT, We would be at a point of 5% unemployment. Do you really want the party of NO back in charge that got us in this mess in the first place? They failed and they want President Obama to fail at the expense of the American taxpayer. CREEPS

    September 22, 2010 03:24 pm at 3:24 pm |
  11. jim

    Let's see, the recession ended in June of 2009.We are now at Sept. 2010.Stimulus was passed to keep unemployment from toping 8%. What is a person that been uneployed for nearly 2 years supposed to think?When the folks in the present administration talk about their plans for a summer recovery tour and people in the real world have to worry if their jobs are safe what good did stimulus do.I see a lot of debt that my children will have to pay for.

    September 22, 2010 03:29 pm at 3:29 pm |
  12. barry

    I don't think anyone will ever really know. The unemployment numbers didn't show it. The theory of it could have been so much worse isn't something you can prove. It will go down as one of the great unknowns. If we run into this again down the road I think it will be dificult to get another stimulus approved. Although making loans to people who had poor credit was a big part of it our Wall Street friends were guilty as well.

    September 22, 2010 03:36 pm at 3:36 pm |
  13. Bill from GA

    A look at graphs showing job growth (losses) and gross domestic product growth from 2008 until now undeniably demonstrates that the stimulus worked. Part of the gain came from TARP, started under W but mainly supported by the dems. Without this government intervention (as claimed by John McCain) we would have continued on a downward trend.

    Many conservatives claim that the economic problems were started when the dems took Congress. Do any of those conservatives have any facts regarding the work of the dems which undermined the economy, which would have to pass a veto by W? Did the simple presence of dems controlling Congress bring down the American economy?

    Pretty lame excuse, blaming the dems in Congress, but if that is all they have, it's good enough for lame-brain conservatives.

    September 22, 2010 04:13 pm at 4:13 pm |
  14. Bill from GA

    Notice how the growth in jobs and GDP flattened when the stimulus peaked. About the time the repugs got their 41st Senator and began to block the dems agenda of repairing the damage.

    September 22, 2010 04:17 pm at 4:17 pm |
  15. Kenneth

    No#1 FDR's first stimulus package was designed to bail out Big Business and banks Etc. first but was voted down by congress FDR had a very rough time getting any of his packages through but finally through perseverance succeeded. I agree a the stimulus only helped those with money. The average Joe was resigned to unemployment hand outs which were not appealing to each person but was the only way to survive. The Banks won't loan the money on top of new reserve to lending regs by Government. Why would any business expand with a dwindling customer base? More money needs to make it directly to the hands of people through jobs. We just found out here in Va. there was almost $1 B unspent which would have put many people in all areas back to work.

    September 22, 2010 04:20 pm at 4:20 pm |