Time has a must-read article today highlighting the failure of the Obama Administration’s economic stimulus plan.
The $787 billion stimulus plan is turning out to be far less stimulating than its architects expected.
Back in early January, when Obama was still President-elect, two of his chief economic advisers, and leading proponents of a stimulus bill, predicted that the passage of a large economic-aid package would boost the economy and keep the unemployment rate below 8%. It hasn’t quite worked out that way. Last month, the jobless rate in America hit 9.5%, the highest level it has reached since 1983.
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[The Administration originally argued] that even by the middle of this year, the stimulus bill would have a positive effect on the unemployment rate. Without the stimulus, the two economists predicted, the unemployment rate would rise to around 8.5% by the middle of this year; add the stimulus, and that rate would drop by a half a point. In reality, the unemployment rate is a full percentage point higher than Romer and Bernstein predicted it would be with no stimulus.