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5 Campaign Fibs About the Economy
usnews
Rick Newman, On Friday October 22, 2010, 10:11 am EDT
Maybe voters really do care about Aqua Buddha, witchcraft, and roughed-up reporters. But the main thing on people's minds when they vote on November 2 will be scarce jobs, the weak economy, and a vanishing sense of prosperity. And as usual, it's impossible to tell what's true and what's not by listening to politicians. Here are five falsehoods being perpetrated by both parties:
The stimulus plan didn't work. Every Republican candidate got the memo: Campaigning against the $814 billion Recovery Act passed in February 2009 is a winner. When the Democrat-controlled Congress passed the stimulus plan, the unemployment rate was 8.2 percent. On Election Day, it will be 9.6 percent. Polls show that only about one-third of likely voters think the stimulus plan helped the economy, while two-thirds think it did nothing or caused harm. The phrase "failed stimulus" is among the top GOP talking points, and it's a reliable rallying cry in the campaigns.
If the goal of the stimulus plan was to reverse the worst recession in 75 years by the time of the next election, then sure, it was a failure. But most mainstream economists believe the stimulus helped end the recession months, and perhaps years, sooner that it would have ended on its own. The nonpartisan Congressional Budget Office says the stimulus plan added significantly to GDP growth and boosted employment by somewhere between 1.4 million and 3.3 million jobs. The problem for Democrats is they made foolish predictions about how the stimulus plan would save the economy, saying, for instance, that unemployment would top out at 8 percent in 2009 and be falling consistently by now. So they set themselves up for failure by creating unrealistic expectations. Economically, however, the stimulus plan was a modest success, and looking back it's not clear that any other ideas at the time would have worked better. The reason the economy still stinks is that we just endured a violent recession plus a financial panic, and a thoroughly trashed economy doesn't heal on a convenient political timeline.
The [Democrats] / [Republicans] are driving the nation toward insolvency. They both are, and in more or less equal measure. In 2001, when George W. Bush took office and Republicans controlled Congress, the budget was essentially balanced and the total national debt was about $5.8 trillion. Washington has run an annual deficit every year since. Over Bush's first six years, when Republicans controlled the White House and Congress, the debt rose by about $3.2 trillion. Over the last two years of the Bush administration, when Democrats controlled Congress, the debt rose by another $2.9 trillion. So over the eight-year Bush administration, the debt more than doubled, rising by a total of $6.1 trillion.
Obama, in his first two years, has added about $3.2 trillion more to the national debt. There are plenty of caveats. The pace of debt expansion under Obama is obviously faster, but that's due to the stimulus and to a shrinking economy that still hasn't regained all the ground lost since the recession began in late 2007. And both presidents passed programs with costs still to be tallied in the future. Still, any politician charging the other party with excessive spending could--and should!--level the same accusation at his own party. Republicans and Democrats alike are addicted to spending money they don't have. More...
5 Campaign Fibs About the Economy
usnews
Rick Newman, On Friday October 22, 2010, 10:11 am EDT
Maybe voters really do care about Aqua Buddha, witchcraft, and roughed-up reporters. But the main thing on people's minds when they vote on November 2 will be scarce jobs, the weak economy, and a vanishing sense of prosperity. And as usual, it's impossible to tell what's true and what's not by listening to politicians. Here are five falsehoods being perpetrated by both parties:
The stimulus plan didn't work. Every Republican candidate got the memo: Campaigning against the $814 billion Recovery Act passed in February 2009 is a winner. When the Democrat-controlled Congress passed the stimulus plan, the unemployment rate was 8.2 percent. On Election Day, it will be 9.6 percent. Polls show that only about one-third of likely voters think the stimulus plan helped the economy, while two-thirds think it did nothing or caused harm. The phrase "failed stimulus" is among the top GOP talking points, and it's a reliable rallying cry in the campaigns.
If the goal of the stimulus plan was to reverse the worst recession in 75 years by the time of the next election, then sure, it was a failure. But most mainstream economists believe the stimulus helped end the recession months, and perhaps years, sooner that it would have ended on its own. The nonpartisan Congressional Budget Office says the stimulus plan added significantly to GDP growth and boosted employment by somewhere between 1.4 million and 3.3 million jobs. The problem for Democrats is they made foolish predictions about how the stimulus plan would save the economy, saying, for instance, that unemployment would top out at 8 percent in 2009 and be falling consistently by now. So they set themselves up for failure by creating unrealistic expectations. Economically, however, the stimulus plan was a modest success, and looking back it's not clear that any other ideas at the time would have worked better. The reason the economy still stinks is that we just endured a violent recession plus a financial panic, and a thoroughly trashed economy doesn't heal on a convenient political timeline.
The [Democrats] / [Republicans] are driving the nation toward insolvency. They both are, and in more or less equal measure. In 2001, when George W. Bush took office and Republicans controlled Congress, the budget was essentially balanced and the total national debt was about $5.8 trillion. Washington has run an annual deficit every year since. Over Bush's first six years, when Republicans controlled the White House and Congress, the debt rose by about $3.2 trillion. Over the last two years of the Bush administration, when Democrats controlled Congress, the debt rose by another $2.9 trillion. So over the eight-year Bush administration, the debt more than doubled, rising by a total of $6.1 trillion.
Obama, in his first two years, has added about $3.2 trillion more to the national debt. There are plenty of caveats. The pace of debt expansion under Obama is obviously faster, but that's due to the stimulus and to a shrinking economy that still hasn't regained all the ground lost since the recession began in late 2007. And both presidents passed programs with costs still to be tallied in the future. Still, any politician charging the other party with excessive spending could--and should!--level the same accusation at his own party. Republicans and Democrats alike are addicted to spending money they don't have. More...
