The Spectacle Blog

Harry Reid’s Great Depression

By on 10.22.10 | 12:07PM

Drudge has turned Harry Reid into a laughingstock by featuring this video, in which Reid claims he averted a worldwide Depression: 

Of course it's a ludicrous proposition. But then again, it is the premise underlying the usual defenses of TARP and the stimulus bill. To take just one of thousands of possible examples, here is White House press secretary Robert Gibbs making a very similar case just a few weeks ago: 

The White House counters that the stimulus program gave the economy a boost at a critical time and may have averted a catastrophe.

"Sometimes doing what's right with the economy doesn't poll well," said press secretary Robert Gibbs. "My hunch is it wouldn't poll well if we were in a Great Depression."

The assumption that the counterfactual to the implementation of TARP and the stimulus would have been a Depression or near-Depression scenario is standard for the estimates of the efficacy of those programs that have been widely cited -- for example, the Congressional Budget Office's 3 million jobs "created or saved" figure, or the Blinder-Zandi study that drew so much attention. 

I'm not sure why it's considered lunacy when Reid articulates this assumption, but not when it is widely used in the presidents' messaging and in commonly-accepted studies. 

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