[denSmumbSes]

LA Times:
http://opinion.latimes.com/opinionla...recession.html

Critics of the $787-billion stimulus package that Democrats pushed through Congress in early 2009 frequently point out how much worse the economy has fared since then than the Obama administration predicted when it proposed the legislation.

It's fair to debate the Keynesian assumptions that underlie ARRA, but it's not fair to say it's a failure just because the economic realities were worse than the projections. That's because projections are guesses. The real question is whether we're better off than we would have been without the extra spending. That's hard to quantify, but economists Alan Blinder of Princeton University (and formerly of the Clinton administration and the Federal Reserve) and Mark Zandi of Moody's Analytics (who advised John McCain's presidential campaign) try to do so in a study released Wednesday titled "How the Great Recession Was Brought to an End." Their conclusion: The country would have been significantly worse off without the stimulus measures passed by Congress in the past two years, and it would have been in truly desperate straits today had Congress and the Fed not taken extraordinary steps to save the financial markets as well.

...

Had Washington done nothing, unemployment would have reached 16.5%, compared to the actual peak of 10.1%, with almost twice as many job losses as there have been. The gross domestic product would have continued to drop through 2010, instead of growing nearly 3%. And the federal deficit would have peaked at $2.6 trillion this fiscal year, instead of $1.4 trillion.

...

Their analysis asserts that the stimulus spending produced a lower deficit than the federal government would have been left with had it done nothing to rescue the economy. Under their model, a laissez faire response by Washington would have yielded a deep and prolonged recession, slashing federal revenues. The resulting deficit would have been larger than the one caused by the stimulus measures.

"When all is said and done," Blinder and Zandi conclude, "the financial and fiscal policies will have cost taxpayers a substantial sum, but not nearly as much as most had feared and not nearly as much as if policymakers had not acted at all. If the comprehensive policy responses saved the economy from another depression, as we estimate, they were well worth their cost."