Any regular reader of this blog knows that I have been critical of the “stimulus” legislation and the government response to the current recession, which has featured lots of spending. In the interests of being even-handed about it, attached is an op-ed piece in today’s Philadelphia Inquirer from the chief economist of Moody’s Analytics that defends the stimulus bill and other actions taken by the federal government.
I’ll let readers judge for themselves, but I don’t find the defense especially convincing. It seems to be short on objective proof, and long on the notion that if nothing had been done things would be worse than they are. That argument is tantalizing because it is impossible to prove or disprove.
What we do know is this: when the stimulus legislation was passed, we were told that it would keep unemployment below a certain level, and it didn’t. We know that much of the money went to keep government workers employed, and in some instances to give them raises. We know that the “jobs created and saved” statistics cited in defense of the stimulus legislation often were phony and unreliable. And we know that the stimulus legislation, and the other federal bailouts that have occurred, have added enormous sums to our federal debt — sums that will burden our economy for decades to come. In the face of such hard realities, the argument that things would have been worse without the stimulus bill seems very thin, indeed.