# Stimulus Patience

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As unemployment figures have grown, critics of the administrations stimulus policy have acquired more headway. This comes right at the moment when we're considering vast spending on health care; a fact that is clearly not lost on political Washington.

An interesting article talking about Obama's plans for encouraging people to be patient on this issue:

"When we passed this recovery act, there were those who felt that doing nothing was somehow an answer," he said. "Today, some of those same critics are already judging the effort a failure although they have yet to offer a plausible alternative."

I think he's correct, and most of the criticism is political in nature and not based around better ideas and solutions. I think it's also inaccurate and misleading for conservatives to point at the 8% figure, which was put forth as an optimistic goal, and declare that the administration has failed. We knew all along that this was a possibility, and we know that unemployment is a lagging economic indicator.

"Remember the promises? They promised you that if you paid for their stimulus, jobs would be created immediately," Cantor said. "In fact, they said that unemployment would stay under 8 percent. Yet just months later, they are telling us to brace for unemployment to climb over 10 percent. They promised jobs created. Now they scramble to find a way to play games with government numbers by claiming jobs saved."

That's one of the things that really irks me about politics, when people who's job it is to be optimistic, and when we know full well what the other possibilities are, but then we bash the optimists anyway just for being optimistic, which is exactly what they were supposed to do. How does this make any sense at all?

What do you all think?

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When running economic models, and trying to forecast what is going to happen 3 to 6 to 12 months out, there is always going to be some degree of error. Nobody has a crystal ball... Nobody knows every little thing that will have an impact, and you can only be so precise... It is merely an approximation.

When the Obama administration stated that the recovery package should help to keep unemployment rate around 8%, and no higher, those comments were supported directly by the "blue chip" economic models. All of the best and most widely respected forecasters agreed. It's just that the economy was even worse than we all thought, but the statements were all made based on the most widely held and agreed upon data available at the time.

I, much like you, Pangloss, tend to agree that it's one thing to attack your political opponents at every turn, and quite another to put forward a better idea. Can you imagine how bad things would be right now had we not done the stimulus? I mean, it just irks me to no end that political games in our nation seem so continuously to take dominance over intelligent and reasonable actions.

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On another note, only about $56B of the$787B approved in the stimulus bill has been spent (as I heard it, that's the amount for which Congress has already "written checks"). That's only 7%.

Seven percent of the stimulus money has been spent, and Republicans are ready to discount it completely, and some are already trying to revoke it so no further money can go out based on claims that the stimulus is not doing what it's supposed to.

7%. Nope... That's enough. The economy is not totally awesome yet, and 7% should be enough, so the other 93% couldn't possibly help.

Do you realize what a false claim this is? Should our english teachers give us an F after we've only written 7% of our paper? Should our CS teachers give us a failing grade after we've written only 7% of our code? Should our math teacher give us an F after we've only performed 7% of the calculation to solve the problem? ... especially when the due date is not for another 2 years? I mean, good grief, people. What the hell is wrong with us?

This whole attack scenario in which these republicans keep engaging is ridiculous beyond measure, and perhaps the worst part is that so many people in our country buy right into it... hook, line, and sinker.

Edited by iNow
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As unemployment figures have grown, critics of the administrations stimulus policy have acquired more headway. This comes right at the moment when we're considering vast spending on health care; a fact that is clearly not lost on political Washington.

When making claims like "vast spending on health care" I think it's important to consider how much health care spending in the US will be a decade down the road unless we do something to fix Medicare:

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I agree, Bascule, but it's still a lot of spending.

I, much like you, Pangloss, tend to agree that it's one thing to attack your political opponents at every turn, and quite another to put forward a better idea. Can you imagine how bad things would be right now had we not done the stimulus? I mean, it just irks me to no end that political games in our nation seem so continuously to take dominance over intelligent and reasonable actions.

I'm afraid so. Even so the president's political opponents are already hard at work insisting that had we not done TARP the situation would be a lot better. They can't possibly know that, but they say it anyway, and those comments will have value amongst the recent unemployed.

But it's undeniably truth that had we done nothing unemployment would have gotten worse (everyone agrees on this). And the unfortunate truth of politics is that lack of action that is followed by worsening economic news always reduces confidence in the current government, 100% of the time. Doing nothing is not an option. Not when Democrats are in charge. Not when Republicans are in charge. So Eric Cantor is not being honest.

On another note, only about $56B of the$787B approved in the stimulus bill has been spent (as I heard it, that's the amount for which Congress has already "written checks"). That's only 7%.

Seven percent of the stimulus money has been spent, and Republicans are ready to discount it completely, and some are already trying to revoke it so no further money can go out based on claims that the stimulus is not doing what it's supposed to.

7%. Nope... That's enough. The economy is not totally awesome yet, and 7% should be enough, so the other 93% couldn't possibly help.

I agree, but I have to say that I'm concerned about the buzz about another stimulus package currently making its way through political circles in Washington. The need for patience seems to exist on both sides fo the aisle at the moment. It's understandable -- mid-term elections are only a year off, and most of Congress is working harder at earning money for those races than they are studying bills currently before them. But I think once they think it through they'll probably come to their senses.

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• 4 weeks later...

I think I'm setting myself up for attack with this, Pangloss, because I know just how very much you love to attack the man instead of the message, but I like how concisely Paul Krugman put this recently. In his article, he also articulates some of his lingering concerns, and some areas of fault, but I've quoted the bits relevant to the discussion here, and I focused more on tone and broader message.

So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government.

<...>

A few months ago the possibility of falling into the abyss seemed all too real. The financial panic of late 2008 was as severe, in some ways, as the banking panic of the early 1930s, and for a while key economic indicators — world trade, world industrial production, even stock prices — were falling as fast as or faster than they did in 1929-30.

But in the 1930s the trend lines just kept heading down. This time, the plunge appears to be ending after just one terrible year.

So what saved us from a full replay of the Great Depression? The answer, almost surely, lies in the very different role played by government.

<...>

The point is that this time, unlike in the 1930s, the government didn’t take a hands-off attitude while much of the banking system collapsed. And that’s another reason we’re not living through Great Depression II.

<...>

All in all, then, the government has played a crucial stabilizing role in this economic crisis. Ronald Reagan was wrong: sometimes the private sector is the problem, and government is the solution.

And aren’t you glad that right now the government is being run by people who don’t hate government?

We don’t know what the economic policies of a McCain-Palin administration would have been. We do know, however, what Republicans in opposition have been saying — and it boils down to demanding that the government stop standing in the way of a possible depression.

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Thanks for the personal attack.

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Hey, listen. No attack intended, man. Just trying to post some information and avoid yet another Paul Krugman tangent.

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I deny that my participation in that thread was either a "tangent" or an example of shooting the messenger. I backed up my opinion with substantial discussion and an open mind, and if you have a problem with that then you should challenge what I said in an appropriate manner.

Thanks.

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On another note, only about $56B of the$787B approved in the stimulus bill has been spent (as I heard it, that's the amount for which Congress has already "written checks"). That's only 7%.

Herein lies my problem with "stimulus" bill; it isn't a stimulus bill. A stimulus bill gets money to the economy quickly so the economy may be stimulated. IIRC, much of the spending isn't scheduled until 2010, 2011, and 2012 . This is a massive increase in the federal government bill, where it will be difficult, if not impossible, to reduce the spending down to the former levels.

I don't have a particular problem with or without a true stimulus bill. I don't have a problem with increasing the size of the federal government if increasing it is truely justified. But I am bothered by the deceit in that this bill was (and is) called something it is not as I very much doubt the public would have approved of either 1) no stimulus bill (clearly something needed to be done) or 2) such a massive increase in the "normal" federal budget.

(And no, I'm not a republican hack, I dislike both parties because they both lie to the public).

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It should be said that obviously we're allowed to criticize parts of the stimulus. Taken to an extreme, "just wait and see" could be a catch-all response to criticism (much like invoking terrorism and questioning patriotism seemed to be circa 2001-05 or so), but I don't think that's really the point here. Just that calling it already failed is ridiculously premature.

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I deny that my participation in that thread was either a "tangent" or an example of shooting the messenger. I backed up my opinion with substantial discussion and an open mind...

Uh huh...

There were plenty more posts where you spun the thread in another off-topic direction so you could rant about Krugman, but I decided to stop at five examples and consider my point made. I just wanted to share the post above and avoid exactly what we're doing now. Like I said, I did not mean it as an attack, and I'm sorry I even mentioned it. It was stupid of me, and I sincerely apologize. Mea culpa.

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I am bothered by the deceit in that this bill was (and is) called something it is not as I very much doubt the public would have approved of...

So, basically you'd have been okay if we called it something other than a stimulus bill?

Something like "The Bill to stabilize the economy and restructure for longer term economic safety while offering a significant degree of immediate stimulus also?"

I mean, really... Sure, we can argue about how it could have been done better, but it's had a pretty major impact at preventing us from the same Great Depression misery which took place in the 1930s. On top of that, considering how many people in our country don't believe evolution is true, or think that ghosts are real, or who think homeopathy is the best possible medicine for all illness... I'm not sure I trust our public to make the best decision in matters concerning the global economy. Besides the fact that we're a nation full of stupid people, we're also incredibly jingoistic. That's just my personal opinion, of course, and I'm not basing my argument on it, just supplementing.

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It should be said that obviously we're allowed to criticize parts of the stimulus.

<...>

calling it already failed is ridiculously premature.

Precisely.

Edited by iNow
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If this doesn't make you impatient, I doubt anything will.

http://news.yahoo.com/s/mcclatchy/20090809/pl_mcclatchy/3286769

WASHINGTON — Although hundreds of well-trained eyes are watching over the \$700 billion that Congress last year decided to spend bailing out the nation's financial sector, it's still difficult to answer some of the most basic questions about where the money went.

Despite a new oversight panel, a new special inspector general, the existing Government Accountability Office and eight other inspectors general, those charged with minding the store say they don't have all the weapons they need. Ten months into the Troubled Asset Relief Program, some members of Congress say that some oversight of bailout dollars has been so lacking that it's essentially worthless.

"TARP has become a program in which taxpayers are not being told what most of the TARP recipients are doing with their money, have still not been told how much their substantial investments are worth, and will not be told the full details of how their money is being invested," a special inspector general over the program reported last month. The "very credibility" of the program is at stake, it said.

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It should be noted that TARP and the Recovery and Reinvestment Act are not the same thing. While both intended as stimulus, they are different programs, the first being put in place while Bush was still in office.

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It should be noted that TARP and the Recovery and Reinvestment Act are not the same thing. While both intended as stimulus, they are different programs, the first being put in place while Bush was still in office.

...which completely misses the point!

It doesn't take much objectivity to understand, nice deflection though.

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So, basically you'd have been okay if we called it something other than a stimulus bill?

Something like "The Bill to stabilize the economy and restructure for longer term economic safety while offering a significant degree of immediate stimulus also?"

I mean, really... Sure, we can argue about how it could have been done better, but it's had a pretty major impact at preventing us from the same Great Depression misery which took place in the 1930s. On top of that, considering how many people in our country don't believe evolution is true, or think that ghosts are real, or who think homeopathy is the best possible medicine for all illness... I'm not sure I trust our public to make the best decision in matters concerning the global economy. Besides the fact that we're a nation full of stupid people, we're also incredibly jingoistic. That's just my personal opinion, of course, and I'm not basing my argument on it, just supplementing.

Well, the point of a stimulus bill is to stimulate the economy. Since only 7% of the money has been spent after 6 months (and, it seems to me, sometimes in ways that aren't by nature stimulus, but this isn't my point), clearly it hasn't really stimulated the economy like the full amount could have. Now maybe the 7% spent now has prevented a "Great Depression" and I don't disagree with this.

However, the plan is to spend most of this money years from now, when the economy might be quite good (because who can predict what the economy will be in two years?) it can't be for stimulus. Because we might not need (or want if there is inflation ) "stimulus" then.

My take on it is that the government took advantage of the sharp downturn in the economy to justify a massive increase that the public would never have permitted under normal circumstances. They provided just enough immediate "stimulus" to make it so they can claim the moral high ground of trying to help the situation. They claim the future spending is for the long-term restructuring for economic stability (but only when they are rarely forced to discuss this point of the bill). In my opinion, this is dishonest and disingenious on the part of all the politicians.

And I am sorry you trust our politicians over the public. Maybe I'm naive, but I'd rather trust the public. Politicians are much more stupid and "jingoistic" than even the public.

Edited by SH3RL0CK
correct typos, quote format
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Well, the point of a stimulus bill is to stimulate the economy. Since only 7% of the has been spent after 6 months (and, it seems to me, sometimes in ways that aren't by nature stimulus, but this isn't my point), clearly it hasn't really stimulated the economy like the full amount could have. Now maybe the 7% spent now has prevented a "Great Depression" and I don't disagree with this.

Just FYI, since the time of that post, we're now closer to 14% of it spent... doubled the amount spent in a little over a month.

That seems pretty quick to me, you know?

However, the plan is to spend most of this money years from now

Actually, most will be spent in 2010, the fiscal year of which starts in less than 3 months.

when the economy might be quite good (because who can predict what the economy will be in two years?) it can't be for stimulus. Because we might not need (or want if there is inflation ) "stimulus" then.

The article which I shared yesterday with which this thread was bumped touched on this. Fears of inflation in this type of environment only make things worse. Yes, deflation is bad pretty much any day of the week, but it's the single best way to avoid catastrophe when the downward self-reinforcing spiral is all we can see.

My take on it is that the government took advantage of the sharp downturn in the economy to justify a massive increase that the public would never have permitted under normal circumstances.

And that's certainly partially true, however, you don't seem to recognize just how potent that spending has been. I tend to agree that they took advantage while they could, but I'm not ready to discount the enormous benefit which they created by doing so.

And I am sorry you trust our politicians over the public. Maybe I'm naive, but I'd rather trust the public. Politicians are much more stupid and "jingoistic" than even the public.

When did I say I trusted the politicians?

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Just FYI, since the time of that post, we're now closer to 14% of it spent... doubled the amount spent in a little over a month.

That seems pretty quick to me, you know?

still rather slow, imo

Actually, most will be spent in 2010, the fiscal year of which starts in less than 3 months.

still a year after the bill was passed...

The article which I shared yesterday with which this thread was bumped touched on this. Fears of inflation in this type of environment only make things worse. Yes, deflation is bad pretty much any day of the week, but it's the single best way to avoid catastrophe when the downward self-reinforcing spiral is all we can see.

And that's certainly partially true, however, you don't seem to recognize just how potent that spending has been.

has it? how do we know this? But I'll conceed this point as it only reinforces the thought that we therefore only needed to spend 7% (or 14%) of the total.
I tend to agree that they took advantage while they could, but I'm not ready to discount the enormous benefit which they created by doing so.

When did I say I trusted the politicians?

Well, you just said you trust them more than the public.

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still rather slow, imo

still a year after the bill was passed...

Um, no.

The Recovery Act passed in mid-February. November 1 is less than three fiscal quarters after that, not a year.

Well, you just said you trust them more than the public.

Again, no.

I just said that I don't really trust the public, not that I do trust the politicians. I can see how you'd get that impression, but it's simply not what I said.

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Um, no.

The Recovery Act passed in mid-February. November 1 is less than three fiscal quarters after that, not a year.

But it won't all be spent on Nov. 1. It will be spent throughout the year.

Again, no.

I just said that I don't really trust the public, not that I do trust the politicians. I can see how you'd get that impression, but it's simply not what I said.

fair enough.
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Once again the OP is completely missing the point.

Who is in charge of implementing the oversight committees and hiring its members?

Those comittee members have stated they don't know where all the money went in the 1st stimulis program.

If the money in the financial bailout also disappears, all your points shedding light on its merit are mute.

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Once again the OP is completely missing the point.

Who is in charge of implementing the oversight committees and hiring its members?

Those comittee members have stated they don't know where all the money went in the 1st stimulis program.

If the money in the financial bailout also disappears, all your points shedding light on its merit are mute.

Are you actually here to discuss things or do you just like reading your own unsubstantiated invective?

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Once again the OP is completely missing the point.

Who is in charge of implementing the oversight committees and hiring its members?

Those comittee members have stated they don't know where all the money went in the 1st stimulis program.

If the money in the financial bailout also disappears, all your points shedding light on its merit are mute.

The point of the financial stimulus plan was to stabilize and pull our economy out of the fatal nose dive it was in. You cannot measure the stimulus plan's success on the transparency of the program, you can only measure its success on the programs ability to stabilize the economy.

As for judging the stimulus plan's success I feel that it will be impossible to judge the program's success for at least 4 or 5 years. The hindsight provided by time will provide us with the best judgement.

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The point of the financial stimulus plan was to stabilize and pull our economy out of the fatal nose dive it was in. You cannot measure the stimulus plan's success on the transparency of the program, you can only measure its success on the programs ability to stabilize the economy.

As for judging the stimulus plan's success I feel that it will be impossible to judge the program's success for at least 4 or 5 years. The hindsight provided by time will provide us with the best judgement.

I agree. My intention was to shed light on a possible origin of the impatience, the OP seemed to overlook.

If the money is wasted/disappears I doubt there will be much benefit from it, just more waste of tax payers money. The govenments solution is always throw money at the problem. If there was a model from the past one could look at where this approach worked, I bet there would be more confidence and less impatience.

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Are you actually here to discuss things or do you just like reading your own unsubstantiated invective?

I substantiated my claim with an article from Yahoo.

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I substantiated my claim with an article from Yahoo.

You posted an article on TARP then went on to rag about the Stimulus.

Do you realize the two are different?

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You posted an article on TARP then went on to rag about the Stimulus.

Do you realize the two are different?

My mistake, regardless, the point that continues to escape you is: The oversight panels are not keeping up with the money trail and the tax payers money is disappearing. One could objectively deduce that the same could possibly happen to the stimulus money, the longer they take to spend it the higher the chances. So people are growing ever impatient.

Sheesh.

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