Lies, damned lies and White House Economic Reports

In how many ways is the American President out of his depth? In fact, are there any ways in which he is not out of his depth? Turns out, according to the White House, that the stimulus was a big success:

President Barack Obama marked the five-year anniversary of a controversial economic stimulus plan by releasing a report on Monday saying that government spending averted a second Great Depression, setting off a new round of partisan debate about the decision.

Obama had been in office only a month when he signed the American Recovery and Reinvestment Act of 2009, a $787 billion stimulus that Democratic majorities in both the Senate and House of Representatives passed over the objections of Republicans.

Many Americans remain doubtful about how helpful the stimulus was for an economy that still struggles to recover from a deep recession that took hold in 2008.

The White House, eager to lay to rest those doubts, issued a five-year report that said the stimulus generated an average of 1.6 million jobs a year for four years through the end of 2012. (Report: http://r.reuters.com/xat86v)

The stimulus by itself raised the level of gross domestic product by between 2 percent and 3 percent from late 2009 through mid-2011, said the report, issued by the White House Council of Economic Advisers.

Jason Furman, chairman of the council, said the Recovery Act had a “substantial positive impact on the economy, helped to avert a second Great Depression, and made targeted investments that will pay dividends long after the act has fully phased out.”

Does anyone at all believe this other than those who are professionally compelled to because of political affiliation? Whatever needed to be done to calm financial markets was done even before George Bush left office. What happened after belongs to Obama. And given the monetary policy that has come since, there is no reason to think the US will leave its present troubles before an even bigger crunch than the one in 2008-09.

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12 Responses to Lies, damned lies and White House Economic Reports

  1. Baldrick

    It’s the same thinking that Kevin Rudd and Wayne Swan saved Australia from the GFC with a $42 billion stimulus package and what is there to show for all that money … absolute crap.
    Taxpayers money just thrown into the air. No wonder we still have a hand-out mentality!

  2. Yohan

    This is the entire issue with Keynesian deficit spending in general. If we have any economic recovery at all, it’s because of the stimulus. If there is no recovery, its because we did not spend enough. Its a failsafe theory that can withstand any logic or criticism because the empirical data is macro economic aggregates that obscure what is actually taking place in the economy on a structural level.

    Did the recovery happen because of the deficit and stimulus, or in spite of it? Could a bigger and more sustainable recovery have occurred if the stimulus was not used at all? These are heretical questions to the Keynesians.

  3. Yohan

    I urge everyone to read Steve’s book on Say’s Law, for a real understanding of economics…..

    http://mises.org/books/kates.pdf

    When are we going to see a new edition Steve?

  4. Andrew

    So in a 2 yr period of 5-6% cumulative expansion of which 2% is attributable to stimulus, it avoided Great Depression. (Defined as “2 years of +1.5% pa growth” apparently.)

    Since the sequester cut an equal but opposite amount from the deficit, how fast did the economy grow? Oh, about the same.

    Yep…

  5. Yohan

    There are many economists that say government spending is so wasteful you need $3 for every $1 of private sector spending. In recent times they are even estimating this figure could be as high as 5 to 1 or even 8 to 1.

    But for the leftist stimulus spenders, any spending is good because the amount is added to the macro GDP figures. Building pyramids, wars, earthquakes, digging holes and filling them up again, building huge earth defences to protect us from an alien invasion e.t.c all a wonderful use of our scarce resources and capital we have painstakingly accumulated.

  6. Louis Hissink

    In how many ways is the American President out of his depth?

    That’s why the US economy, unlike emerging ones, is submerging (h/t Peter Schiff of Europac).

  7. Steve Kates

    Ah Yohan. It pleases me no end to see you have read my Say’s Law and the Keynesian Revolution. You do remind me of the book and the great David Ricardo where you wrote.

    .

    Building pyramids, wars, earthquakes, digging holes and filling them up again, building huge earth defences to protect us from an alien invasion e.t.c all a wonderful use of our scarce resources and capital we have painstakingly accumulated.

    John Stuart Mill had heard it all and wrote his refutation of The General Theory, published in 1936, as part of his Principles of Political Economy, published in 1848. But my book stays as it is since there is nothing else to add to what it says there that I have ever come across since, other than confirming the role of Harlan McCracken since it turns out he invented the phrase, “supply creates its own demand”. But Free Market Economics takes up the story from where that left off, and the 2nd ed is coming in July.

  8. The Pugilist

    Say’s Law and the Keynesian Revolution.

    Was that your PhD thesis Steve? I pretty much read it cover to cover in three sittings. What I learned from that book is amazing. I basically unlearned my macro from uni or at least the misconceptions I had been fed. Amazing what a little bit of HET can do for you.

  9. Ant

    Individuals in the Obama administration must pinch themselves in disbelief at how they can put out such manure and have it reported seriously in the majority of the media.

  10. Mk50 of Brisbane, Henchman to the VRWC

    In how many ways is the American President out of his depth?

    Is this a trick question? Because the answer is ‘in as many ways as exist’.

    The Preshizzle (Paco™) is utterly convinced he’s the smartest man who has ever existed. This is a characteristic of burbling imbeciles with the intellectual depth of a carpark puddle.

    he makes the Bourbons look like geniuses.

  11. The Beer Whisperer

    Yes, they just peered into a parallel universe and saw what happened without stimulus. Of course, only “the chosen one” could see it. Us mere mortals just have to believe. Or else.

  12. LABCR-TV

    Steve, you are quite right about Oduma being out of his depth. But that is the whole point of why he is prez. He is merely a lackey.
    He is not running the country, the fed res is running the country. They are the only ones who have the financial leverage to manipulate interest rates, exchange rates, precious metal market, stock market. Oduma’s role has been to manipulate elections and employment statistics.

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