The Spectacle Blog

The Stimulus Didn’t Jump-Start Anything

By on 9.26.11 | 4:45PM

John Taylor, Stanford economist and namesake of the 'Taylor Rule,' takes on Mark Zandi's widely-reported prediction that President Obama's jobs bill will create 1.9 million jobs: 

However, the terribly weak economic recovery has forced an important change in the way that these predictions are put forward by modelers like Zandi. They have to admit that even their exaggerated estimated impacts of the temporary stimulus packages are, yes, temporary. Macroeconomic Advisers reports the same thing: "the GDP and employment effects are expected to be temporary" and more specifically that "these proposals will pull forward increases in GDP and employment, not permanently raise their level." 

In other words, even if, on balance, jobs are created by the package (which is doubtful), they will be destroyed as soon as the temporary package is over, according to Zandi. Thus even the promoters of such temporary packages agree that they will not jump-start the recovery, which is what is needed to really reduce unemployment. [Emphasis added]. 

Probably that recognition is why Obama has studiously avoided referring to the jobs bill as a stimulus. The word stimulus and its implied metaphor are dead. 'Propping up' is a more appropriate phrase than 'jump-starting,' for Obama's purposes. 

Send to Kindle

Like this Article

Print this Article

Print Article