On stimulus anniversary, Americans not in party mood
Wednesday may be the stimulus package's one-year anniversary, but Americans aren't in a party mood.
believe the $787 billion American Recovery and Reinvestment Act (ARRA) created jobs, according to a recent CBS News/New York Times poll. Another 41 percent of Americans expect it will do so; 48 percent think it won't.
Until unemployment falls, the stimulus will be popularly viewed as a failure.
But that's not the best measure of ARRA's effectiveness, says Roger Aliaga-Diaz, a senior economist at Vanguard Group. 鈥淭he right comparison is where we are versus where we鈥檇 be without the stimulus.鈥�
And there, most economists are in agreement: The stimulus allowed the US to avoid an economic depression, where unemployment would have been higher and economic activity lower than where it is today.
The stimulus has 鈥渂een a qualified success,鈥� says Gus Faucher, director of macroeconomics for Moody's Economy.com, giving it 鈥渁 solid B鈥� grade. Its effect would have been larger if the stimulus had been larger, he notes.
The problem is that it's hard to quantify the success of such programs. How do you count something that didn't occur? 鈥淚t鈥檚 not something you can observe,鈥� Mr. Aliaga-Diaz says.
There's also an inherent lag between government spending and its economic effect, says Aliaga-Diaz. 鈥淔rom the moment it鈥檚 conceived to when it鈥檚 passed, there鈥檚 an implement lag, then an execution lag, and finally an effect lag in the economy. It takes time.鈥�
The White House is well are of these problems. That explains why Vice President Biden, in praising the ARRA Wednesday, crediting it with in a report to President Obama made public on , the government鈥檚 official website for Recovery Act spending.
That's a mushy number, based on reports by recipients of stimulus money and therefore difficult to calculate definitively.
And many Americans are looking for hard numbers.
鈥淧eople aren鈥檛 going to feel good until they see job gains,鈥� Mr. Faucher explains. 鈥淚t鈥檚 the most tangible part of recovery.鈥�
That upturn could still be a few months away because employers want to make sure an expansion is fully in place before they begin hiring.
