Stimulus Helped Grow Debt, Not Economy
March 14, 2012
By Ramesh Ponnuru
Last week’s release of the February employment report set off the predictable partisan squabbling, with Democrats emphasizing the positive (227,000 new jobs) and Republicans the negative (the still-shrunken labor force and still-high unemployment rate).
Democrats say the economic recovery shows that the stimulus bill that President Barack Obama signed in 2009 worked. Republicans deny it. Although we can’t know how the economy would be faring if Congress hadn’t passed a stimulus, we have good reason to doubt that it did much good.
Media fact-check organizations have no such doubts. Factcheck.org says it’s “just false” to deny that the stimulus has created jobs. It cites the Congressional Budget Office’s estimate that the stimulus had saved or created millions of jobs. But the CBO, as its director has explained, hasn’t really checked the effect of the stimulus. It has merely reported what the results of additional federal spending and tax credits would be if you assume that spending and tax credits are stimulative.
In other words: If you assume that stimulus works, it must have worked. This circularity doesn’t bother PolitiFact, a group that seeks to elevate the tone of our political debates but usually lowers it. Relying on the CBO and other groups that use similar methods, it says people who deny the effectiveness of the stimulus have their “pants on fire.”