So, How's That Stimulus Workin' Out For Ya?

Via Jim Pethokoukis, a freshly updated version of the Obama administration's old chart projecting how unemployment would look with and without the stimulus—and comparing it to the rather more dismal reality: 

Remember this next time you hear someone bragging about how well the stimulus worked. 

Watch Reason.tv's Q&A with economist Richard McKenzie about why the stimulus isn't working:

Comments

[Episiarch]

Remember this next time you hear someone bragging about how well the stimulus worked.

Oh, I'm sure we'll get some TEAM BLUE dipshits along momentarily to explain how that graph is wrong and how it did work. Somehow. In Fantasyland.

[Almanian]

I personally saved or created two million jobs in the last two years.

Doubt me? Prove that I didn't.

[Aresen]

I created over 365 jobs last year.

Flushed 'em every time.

[Almanian]

You are a one-person recovery in action!

[DNS]

You are a one-person recovery in action!

But will ObamaCare cover an overactive colon? I have it on good authority that bowel movements will be restricted to one every three days, or three for every five. I imagine the eco-theologists will frown on such wasteful over-consumption of water, and don't even get them started on the amount of trees killed and TP wasted.

[.]

One or two a day is a normal average, not "overactive."

[DNS]

One or two a day is a normal average, not "overactive."

Sarcasm and hyperbole are lost upon thee. I suggest more fibre in your diet.

[Aresen]

Not to excuse Team Blue, but the stimulus crap got started under Team Red.

[Episiarch]

But it's TEAM BLUE's ball now, so they will of course defend it, and TEAM RED will stay silent (because of their complicity) or opportunistically attack it. They all have such integrity.

[Almanian]

Yes indeed - fuck all of 'em.

[R C Dean]

Not to excuse Team Blue, but the stimulus crap got started under Team Red.

Actually, no. The TARP bailout was a joint venture, but the stimulus was all Blue.

[Spiny Norman]

This stimulus. But the Treasury sent me a stimulus check for something like $400 in May of 2008.

I immediately put it in my savings account.

[name]

he's referring to bush's stimulus which looks downright quaint by today's standards.

at least bush gave it as a tax refund more or less.

[R C Dean]

But that's not the stimulus the chart refers to. That one is pure Blue.

[Ted S.]

Didn't Congress have Team Blue majorities in both houses at the time? Both parties deserve blame.

[Fiscal Meth]

"Oh, I'm sure we'll get some TEAM BLUE dipshits along momentarily to explain how that graph is wrong and how it did work."

Either that or they'll say that the graph is right but we can't prove that it wouldn't have been worse without it.

[Criswell]

My friends, you have seen these events, based on the sworn testimony of those who survived this terrifying ordeal. Can you prove it didn't happen?

[PapayaSF]

You see? You see? Your stupid minds! Stupid! Stupid!

[TEAM BLUE (GILMORE VERSION)]

Oh, I'm sure we'll get some TEAM BLUE dipshits along momentarily to explain how that graph is wrong and how it did work. Somehow. In Fantasyland

"Things would have been worse!"

"We dodged a bullet!"
(and impaled ourselves on a giant serrated spike)

"The NYT says you're wrong!"

http://www.nytimes.com/2010/02.....hardt.html

"You caused this mess anyway!"

[Pro Libertate]

It's time to make a confession. I've been destroying the jobs created or saved by the stimulus. At first, I was just destroying one or two a day, but the addiction grew, and now I'm destroying as many as ten thousand a day. I need help.

[Almanian]

You. Evil. BASTARD!

[JW]

Help? OK, but I'll only destroy 5,000 jobs daily. Unlike you, I have self-control.

[Pro Libertate]

I thought so, too, until I passed my first 1,000.

[JW]

You were tempted by the Dark Side's cookies, weren't you? It's always the cookies with you.

[Geotpf]

Ok, I'm game. If the economy was worse than the original authors of that graph thought it was, then it is quite possible (in fact, extremely likely) that the stimulus lowered unemployment. The only way to prove it is to go back in time and not pass the stimulus bill, and then wait and see what the unemployment rate is today.

But thinking about it logically means that it worked. The government hired people it wouldn't have hired if there was no stimulus bill. Those people are no longer unemployed. Therefore, the unemployment rate dropped. Duh.

[Gabriel]

The Stimulus does not consist of merely hiring people directly.

But think about it in these terms. They have models which read that unemployment would be at X%. The models also say that with "stimulus" they'll be at a lower Y%.

But their models are false and didn't predict what would happen well. Those models justify stimulus. That means we all owe a couple of a trillion dollars more on something that the models that justify it in the first place can't assess.

[Scruffy Nerd Herder]

I'm sure it's all because of externalities.

[Old Mexican]

Remember this next time you hear someone bragging about how well the stimulus worked.

But... but... but jobs saved! SAVED!

Roads!

[Almanian]

Jesus saves.

BUT DATSYUK SCOOOOOOOOORES ON THE REBOUND!!!

[Drax the Destroyer]

SSSSSSSSSSSSSSSSOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOMAAAAAAAAAAAAAAAAAA
AAAAAAAAAAAAALLLLLLLLLLLLLLLLLIIIIIIIIIIIIIIIIIIIAAAAAAAAAAAAAAAAAAAAAAAAAAAA
A!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I'm already drinking...

[Old Mexican]

why the stimulus isn't working

http://www.commonwealthsolar.c.....Bucket.jpg

[FungoFungo]

OK, that actually makes a lot of sense dude.

privacy-tools.cz.tc

[Aresen]

The failure of TARP and the stimulus package can be explained very simply by the fact that they were devoting capital to saving failing businesses instead of allowing capital to flow naturally to businesses that were succeeding.

(And no, solar power and biofuels and wind power and other green energy projects were not succeeding.)

[Scruffy Nerd Herder]

Fucking Austrian economic theory, how does it work?

[Peter Schiff]

Very well actually. Shit made me rich, suckas!!!

[DNS]

(And no, solar power and biofuels and wind power and other green energy projects were are not succeeding.)

FTFY. T Bone Pickens is losing quite a bundle on his eco-theological gamble. Natural gas is the only thing keeping his alternative energy dreams evanescent.

[Carlos Estevez]

(And no, solar power and biofuels and wind power and other green energy projects were not succeeding.)

They weren't succeeding; they were winning, duh!

[Zimbabwe Bob]

The graph proves that government predictions about the unemployment rate, with or without stimulus, were wildly wrong.

It doesn't say anything about whether or not the stimulus affected the unemployment rate.

[Aresen]

Granted. But why would you base a gigantic program on an economic model that produces those "wildly wrong" predictions?

[Old Mexican]

Stupidity?

[Mainer]

Cupidity, more likely.

[Zimbabwe Bob]

My point is that Suderman is making claims that aren't supported by the evidence he presented. He might be right about the effect of the stimulus, but he undermines that by being so blatantly disingenuous.

[DNS]

He might be right about the effect of the stimulus, but he undermines that by being so blatantly disingenuous.

Are you suggesting the phrase "Saved or Created" is tautological bullshit?

[God]

Excuse me? I do both, bitch!

[Scruffy Nerd Herder]

My point would be that the stimulus was obviously based on a economic prediction model that is fundamentally flawed. Spending a trillion dollars you don't have, justified by an economic theory that can't make accurate predictions, is the height of stupidity.

[Mainer]

A trillion dollars.
$ 1,000,000,000,000.
One thousand billion dollars.
One million million dollars.
If you earn $50k a year, it would take 20 million years to earn a trillion.

My point is how staggeringly absurd to hear people argue that spending that much money and missing your prediction is just an "Oh Well" "Coulda been worse" "We'll never know".

Jeebus.. A TRILLION DOLLARS ?!

[Aresen]

Can I settle for living 20,000 years and only earning $1 billion?

[Concerned Citizen]

Just for the heck of it, let's contemplate this - the Federal Gov't could give every adult American $1 million dollars. For a mere $300 million, every problem gets solved. That they're not proposing this, but spending tons more on other shit, should tell us something. Our well being is not their concern.

[Casio]

Fucking Math, how does it work?

[Mensan]

...give every adult American $1 million dollars...[=]...$300 million

When was this mass extinction event, and why didn't I hear about it? And why the hell was there still so much traffic on the road today?

[Concerned Citizen]

Ok, I was rounding, but we were at 308,745,538 citizens in December, 2010. Count the adults any way you want, but for approximately $300 mil, everyone's problems are solved.

[JD]

Fucking arithmetic, how does it work?

[JD]

I think you need to check your math. $300 million divided among 308,745,538 people is $0.97 per person. $1 million per person would be over $300 trillion.

[JD]

I think you need to check your math. $300 million divided among 308,745,538 people is $0.97 per person. $1 million per person would be over $300 trillion.

[JD]

I think you need to check your math. $300 million divided among 308,745,538 people is $0.97 per person. $1 million per person would be over $300 trillion.

[Johnny Clamboat]

Off by a factor of a million. It's a rounding error.

And I thought the original 25-year Medicare projection was bad.

[Rrabbit]

Epic FAIL of the school system.

[Neu Mejican]

That's how it is done more and more around here these days.

[JW]

Working with the available data is disingenuous?

Also, see here.

[Old Mexican]

Re: Zimbabwe Bob,

It doesn't say anything about whether or not the stimulus affected the unemployment rate.

I should sell you this car that runs 100 miles per hour running on water, as you would not care about the accuracy of my claims - if you apply the same logic consistently.

[Mike M.]

The government can probably still meet their goal by the end of the year if they can just get another one or two million people to stop looking for jobs completely and drop out of the workforce!

[Tony]

Until you visit the alternate universe in which there was no stimulus, your only complaint is that their predictions were too rosy, not that the stimulus didn't work with respect to employment.

[R C Dean]

Non-falsifiable claims are the stuff of theology, Tony.

[Shorter DNS Tony]

If the unemployed aren't counted, they aren't unemployed.

[Mensan]

That's why the official unemployment rate is 9% while the real unemployment rate is closer to 18%.

[Tony]

The claim that "the stimulus didn't work on employment" is just as much speculation.

[Aresen]

Uh. Equally, the claim that "the stimulus created or saved X many jobs" is speculation.

But it cost trillions to achieve the same level of uncertainty.

[The Ingenious Hidalgo]

Also, predictions were given beforehand for how well it would do. They were wrong. It's right there in that graph.

[Tony]

Yes, and that's the only claim that can be made. The graph was put out by president-elect Obama's team who have long since admitted it was too rosy (though it did come with enough of a disclaimer to make it not much more than decorative art).

[The Ingenious Hidalgo]

You don't think it's relevant that the people who made the policy were wrong about the effects of the policy? If the margins of error were so great that the graph was essentially meaningless, isn't that an admission that they didn't know what the effects of their policy would be? Aren't both possibilities pretty damning?

[Tony]

I think they were justifiably confident that no stimulus would be worse for jobs than having stimulus.

[The Ingenious Hidalgo]

Yeah, but the question isn't whether spending a trillion dollars created some quantity of jobs, it's whether the jobs created were worth the trillion dollars spent. What annoys me is whenever we propose a free market solution to something, you demand that we give real-world evidence rather than just economic theory, even though our way has basically gone untried. And here's a clear case of your way being tried, with predictions given upfront, and the predictions have been shown to be false. But apparently that doesn't mean anything because there was a disclaimer saying 'This is by no means falsifiable, no no.' In that case, what exactly would change your mind?

[Tony]

it's whether the jobs created were worth the trillion dollars spent.

Very true. You'd have to appeal to a counterfactual history in order to get real evidence for this, though. There were plenty of people on all sides of politics who were predicting depression-level unemployment if nothing was done, though.

[Mensan]

Great Depression peak real unemployment: 27%
Current real unemployment: 18%

Hey, we're 2/3 of the way there!

[Zimbabwe Bob]

If the margins of error were so great that the graph was essentially meaningless, isn't that an admission that they didn't know what the effects of their policy would be?

Uhh doesn't this argument apply to pretty much every government policy? Being absolutely wrong is almost a pre-requisite for a large-scale government program, not an anomaly.

[JW]

They were either deliberately dishonest or incompetent to make such a prediction. Either way, it demonstrates that the administration isn't qualified to have anything to do with it.

[Name Nomad]

*bang*
Bystander: You ended his life!
Shooter: You can't know that. He might have keeled over from a heart attack even if I hadn't shot him.

[Montani Semper Liberi]

You mean every time there was a recession prior to the Great Depression? You know, when things would usually get turned around after a couple years instead of decade. Yes, that reality sounds terrible.

[SugarFree]

Quick preview: Tony ignores all objections and makes a few more stupid comments. Then he brings up FOX news and whines about Republicans. A few of you counter with cogent arguments. Tony ignores these and calls you racist. This goes on for two hours.

Do we really need to watch the show?

[Episiarch]

The best part is that he did exactly what I said his ilk (well, the real ones, anyway) would do in the very first comment.

[Tman]

The predictablility has become immensely boring and tiresome.

We need new smarter trolls. Hey! I hear Juan Williams is feelin kinda frisky these days, maybe we should invite him over?

[DNS]

Do we really need to watch the show?

No, but the only other things on the teevee are Lifetime and Bravo. So, it's pretty much a wash.

[Episiarch]

You need a better cable package.

[DNS]

You need a better cable package.

An upgrade in co-workers would be preferable.

[JW]

We need on-demand trolls.

[Pro Libertate]

I've been illegally downloading to meet all of my troll needs. From hacking into iTroll.

[Mainer]

God I hope not. The Tony show is many things, but mostly it's incredibly BORING.

[Old Mexican]

Re: Tony,

Until you visit the alternate universe in which there was no stimulus, your only complaint is that their predictions were too rosy, not that the stimulus didn't work with respect to employment.

http://www.youtube.com/watch?v=czcUmnsprQI

No need for alternate universes. Stimulus simply do not work.

[Matrix]

These guys have been making rosy preditions for years and we have seen time and time again that the actual costs run much higher than they projected. Yet, people like you fall all over themselves running up and claiming "they're doing a good job." Imagine business that operated like how the government is operating... it would have gone under LONG ago! But you and your ilk continue to say, "well, they may have been wrong all the time on their projections and things are way more expensive than they imagined, but at least they're doing something. And since we don't have anything to compare it with, they're doing pretty good." Eat. shit. and. die!

[Tom]

I interpret this, not as a claim that unemployment would necessarily be lower had it not been for the stimulus, but as a claim that their projections were so far off, that clearly they know nothing of the economy, and therefore should not be trusted with such decisions.

[Matrix]

😀

[Rrabbit]

Why blame on stupidity what you can blame on malice? They just noticed a chance to grab a big chunk of taxpayers' money and give it to their friends and supporters.

[Mainer]

Alot of the defense of things like the stimulus flows from the presumption that simple ideas are for simpletons. Clearly and obviously, people take more care with their own money than someone elses, so the government clearly and obviously won't spend your money wisely. But smart people, people with Ivy League degrees understand sophisiticated eoonomics, stimulation of aggregate demand, Keynesian multipliers..complicated answers that are deemed more worthy BECAUSE they're complicated. And if you don't buy them, it's clear that you aren't one of the smart people.

[Scruffy Nerd Herder]

People who believe that the government is an efficient spender of funds, either have never worked for the government, directly or indirectly, or are outright lying. How many times have I gotten a call from a government purchaser that has to buy something today, because their budget is use it or lose it.

[Matrix]

I work for the government, and I know first hand that it is completely inefficient with money. Much of it comes from bureaucratic BS, but then there's the "use it or lose it" mentality with budgeting. If you don't spend all your budget, you won't get the same or more next year. So instead of encouraging thrift, they encourage excess.

[Ken Shultz]

The Obama Administration has some very...um...unconventional ideas about where economic growth comes from--to say the least!

[.]

They think it comes out of the same part of their anatomy as their "unconventional" economic ideas.

[Tony]

But keep on dinging Obama with this chart that Romer put out before Obama was sworn into office that came with the following disclaimer:

"It should be understood that all of the estimates presented in this memo are subject to significant margins of error," the report states. "There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity."

Obviously the chart's predictions were off, and the Obama people have said exactly that. Things were worse than predicted here. Oh well. Lots of independent economists think the stimulus has created upwards of a million jobs.

So what we have here is another substanceless eye poke at Obama without a single actual counterproposal to lowering unemployment.

[Mainer]

"Things were worse than predicted here. Oh well."

from my 12:10 post upthread:
:..staggeringly absurd to hear people argue that spending that much money and missing your prediction is just an "Oh Well""

[Ken Shultz]

"So what we have here is another substanceless eye poke at Obama without a single actual counterproposal to lowering unemployment."

How 'bout slashing income taxes to lower the cost of hiring unemployed people?

How 'bout slashing the capital gains tax to encourage investment?

...if you're not on board for either of those very conventional ideas about where economic growth and jobs come from--then how 'bout at least ridiculing the stupidity that was the stimulus?!

Squandering our future paychecks on government largess today makes less--not more--consumer discretionary income available in the future, and that has a meaningful impact on unemployment.

If Obama can't even see that in retrospect, then throwing him out of the White House might be the most practical proposal to create more jobs anybody's tabled yet.

[Tony]

Cutting income and capital gains taxes do not substantially create jobs, though yes the idea is very conventional, as in thrown around a lot without any supporting evidence.

[Ken Shultz]

Why doesn't cutting the cost of paying people their take home pay encourage businesses to hire unemployed people?

[Old Mexican]

Re: Tony,

Cutting income and capital gains taxes do not substantially create jobs[...]

"Not stealing from people does not substantially create jobs..."

And not choking your dirty-sex partner to death may not increase your sexual pleasure significantly... but does stop you from being a murderer.

[Zeb]

The stimulus probably did create that many jobs by some measure. But the question that promoters of the stimulus fail to answer is how many jobs were not created because of the stimulus that would have been created without it?

[roystgnr]

Before Obama came into office?! Why, it's totally unfair to expect a model to actually *forecast* anything! Just because a model can't predict the future doesn't mean it can't be used to control the future; that's no sillier than driving a car with your eyes closed.

[Tom]

"Lots of independent economists think the stimulus has created upwards of a million jobs."

By "lots of independent economists" he means Paul Krugman. There is a reason that he is the only economist the mainstream media ever gives a platform...he's the only one who believes this shit.

[Pedant]

The claim that "[t]hings were worse than predicted" is just as much speculation. It's entirely possible that the "without" graph was correct, and the stimulus simply had an effect opposite to the one intended.

[Gilbert Martin]

If you want a good laugh, check out the Economic Policy Institute letter in today's Wall Street Journal.

They were trying to defend their pie in the sky predictions about the stimulous by claiming that their numbers were in line with other estimates by Goldman Sachs, Mark Zandi, Allen Blinder and various other true believers in Keynesean kool-aid economic theory.

It appears that the phrase "circular logic" in not in their lexicon.

[Scruffy Nerd Herder]

Goldman Sachs is not Keynesian by nature. They're more of the Barbary Pirates school of economic theory.

[Ken Shultz]

"Once the conference report was finalized and about to be sent to the president, we revised our estimates to reflect the correct composition of the recovery package. On Feb. 12, 2009, we wrote that the conference bill would save or create at least three million jobs. This three million estimate is the only estimate we made regarding the American Reinvestment and Recovery Act prior to its passage. This estimate of three million jobs is well in line with other public and private estimates, including those of Goldman Sachs, J.P. Morgan Chase, Global Insight, Macroeconomic Advisors, Zandi/Blinder, the Council of Economic Advisers and the Congressional Budget Office."

http://online.wsj.com/article/.....23134.html

It's no big secret that when you hire somebody to do an analysis, the numbers have a funny way of adding up so that it justifies doing the deal...

It works that way with IPOs. It works that way with market forecasts. It works that way with a lot of things.

This is a standard maneuver for people who've made huge mistakes in the past--well everybody else looking at the market made the same mistake!

Doesn't mean the stimulus was a good idea.

They basically squandered the TARP money. That stimulus money was basically the money Wall Street paid back--and the Obama Administration pissed it all away on nothing.

That money is still coming out of our future paychecks. If the Obama Administration and the stimulus cheerleaders can't admit that was a mistake in retrospect, how can we trust them not to make similar mistakes in the future?

I don't care how many other lemmings were running off the cliff; it doesn't justify them running off the cliff--and with our money too?

[P Brooks]

The claim that "the stimulus didn't work on employment" is just as much speculation.

The truly sad part is whatever jobs *were* saved or created were government jobs which shouldn't even exist.

[Ken Shultz]

Much of went to stave off the reckoning of overpaid government employee unions at the state level anyway.

It may have kept some rotten fruit on that dead vine a little longer, but there isn't much in the way of new growth from that.

Keeping so many state workers feeding on the public trough for longer probably did more harm than good in the long run.

[Mainer]

Why do you hate the middle class ?

[Ken Shultz]

How dare you!

The middle class is the taxpayers!

Government employee unions aren't the middle class! They're tapeworms up the middle class' rear end.

You know that kind of tapeworm with the hook on its scolex? Gorging itself on what's rightfully ours.

Killing us by degrees.

[Mainer]

So you're saying my sarcasm wasn't obvious..........

[Ken Shultz]

Naw, sometimes I miss it, but that time I got it!

I just like throwing something in about the government employee unions being tapeworms up the middle class' ass at every opportunity.

[Middle Class Colon]

AAAAAAAAAAAHHHHHHHHHHHHHHHHH!

[DanD]

The people who made that chart are amateurs at propaganda. If you want to do it right, you project employment from 2013 onward. That way, when you turn out to be fantastically wrong, you're either in your second term and it doesn't matter, or you can point to the guy who beat you and say it's him and his enablers in Congress who sabotaged your grand plan to heal the world.

[heller]

No you wildly overestimate both unemployment figures. Then when the numbers come out it looks like the stimulus did even better than you predicted.

[heller]

The reason the stimulus didn't work was because Obama failed to explain to the American public how important it was.

The reason the stimulus didn't work is because we didn't believe with all our heart that it could.

The reason the stimulus didn't work is because we failed our president.

[Gilbert Martin]

And RACISM!

You forgot to throw that one in.

[Tom]

The cameraman shooting b-roll for the video clearly has a thing for Asian chicks...not that I blame him.

[Lord Humungus]

I thought I was the only one who noticed that.

[Mensan]

Yeah, I picked up on that too.

[Joshua]

But I put my same old numbers into my two year old formula and it's telling me that the stimulus is working!

[P Brooks]

The reason the stimulus didn't work is because we failed our president.

You didn't clap, you heartlkess bastards!

And now...

now...

*sobs piteously*

Tinkerbell's DEAD!