That Was Some Powerful Stimulus

Looking at GDP from the last several quarters of the Bush years and the first several quarters of the Obama years, one thing is obvious: the stimulus, which was signed in mid-February 2009, absolutely pulled the economy out of a very deep recession. The chart shows almost instant recovery when the stimulus money was injected into the economy.

Well, it turns out the stimulus had an even greater effect give that the downturn in economy was even deeper that originally believed.

Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.

By the third quarter of 2009, the economy was back in positive territory again. Now imagine if these real GDP numbers had been known at the time. Perhaps the stimulus would have been twice as large. The impact would have been tremendous.

  • Brutlyhonest

    BULLSHIT! i see rovePAC-funded stuff on the teevee several times a day that tell me the stimulus failed!

  • JMAshby

    This shows just how out-dated and archaic the tools we use to measure the economy are.

    I doubt the numbers for the present time are accurate either.

    • jjasonham

      Very true. I’ve always thought this about polling as well.

  • jjasonham

    This always seems to be the type of news we get about this administration. The benefits always seem to be bigger than we anticipated. We all wanted more stimulus, and it definitely would have had a bigger impact, but given the circumstances, they were able to get the job done. Staving off a deeper recession, OBL, the repeal of DADT, ACA; these are a few examples that I reference when drawing conclusions about the actions of this administration in real time. There hasn’t been a time when the results weren’t sufficient or better than we expected, despite our desire for “stronger” action. Those results inform my conclusions and make me think twice about automatically belittling the president’s reasoning and tactics (there’s a difference between questioning and outright denouncing).

    • Scopedog

      “The benefits always seem to be bigger than we anticipated.”

      Pretty much sums up my view of the Obama Presidency. Despite the screams and yells and outright hostility, things have gotten done, and the benefits are not limited to a small group. Nearly everyone benefits.

      However, one can only see this if one were to step back and really look at the hard numbers instead of the hysteria that the Right and some on the Left keep pushing.

      • jjasonham

        Right. It’s a stark contrast to the Bush Administration; the results always seemed to be worse than we feared. I’m telling you: not watching or following the MSM too seriously has released me from that vicious cycle.