MAHER, MOORE, SPITZER & KRUGMAN

There is no better clip out there explaining the broader outlines of what the conservatives have done with the economy than this:

THE TRUTH ABOUT THE STIMULUS

The Center for Budget and Policy Priorities published a brilliant report last month on the myths surrounding the stimulus.  Read the full report here.  The executive summary:

1. Increases in unemployment do not mean the law isn’t working.  CBO says the stimulus will increase real GDP by between “1.4 percent to 3.8 percent higher in the fourth quarter of 2009 than it would have been without the stimulus” and “1.1 percent to 3.4 percent higher in the fourth quarter of 2010.”   [T]he stimulus results in approximately 2.5 million more jobs by the end of 2010 than would have been the case without it,” Economist Mark Zandi of Moody’s Economy.com estimated, “and leaves the unemployment rate almost 2 percentage points lower.”  CBO estimated in March that, because of the law, “the unemployment rate [in its forecast] is lower than it would otherwise be by about 0.9 percentage points in the fourth quarter of 2009 and 1.3 percentage points in the fourth quarter of 2010. The boost to total employment peaks at about 2 ½ million jobs in the second half of 2010.”  In its August budget and economic update, CBO stated that, “Even though some elements of CBO’s forecast, particularly the unemployment rate, have clearly worsened, such revisions to the forecast reflect a much sharper ongoing deterioration in underlying labor market conditions than had been anticipated, rather than a smaller impact of the legislation.”
2. What has been spent of the stimulus has been helping Americans and it was expected that the stimulus money would be spent over time.  States have been able to fund Medicaid, keep teachers and police and extend unemployment benefits.  2.5 million people are getting extended unemployment benefits because of the stimulus.  The estimated pace of spending is what was projected when the legislation was passed.
3. The recovery law only adds 3% to the budget shortfall through 2050.
4. The law was designed for states to meet their budget shortfalls.
5. GAO has confirmed that states are generally spending the money appropriately.

Some Republicans have complained that some funds won’t be spent until next year, but the fact that unemployment is a lagging indicator will mitigate the recession’s lingering effects as the economy begins growing again.  Our real risk was a deflationary spiral leading to a new depression.  Obama and the Congressional Democrats (along with 3 Republican Senators) saved us from that, although they watered the legislation down both in cost and by including tax cuts, which have less of a stimulative effect.

Let’s remember how we got here:  unaffordable corporate tax cuts and subsidies, unaffordable tax cuts for the ultra-rich, an unaffordable war in Iraq, deregulation of the financial industry, deregulation of the housing industry, unreasonable risk taken by (largely Republican-led) Wall Street firms, Alan Greenspan’s failure to use his regulatory authority, the virtual elimination of any meaningful antitrust law, a big-corporate run media failing to question Wall Streeters, and the Republican failure to invest in the American people in the form of education, housing and health care.

The Republicans ruined the economy over their 8 years in power (8 in the White House, since 1991 in the Supreme Court, 12 in the House, and 5 1/2 in the Senate).  Now, the Democrats are fixing it.  Let’s hope it’s fixed soon enough to effect the 2010 elections, when Republicans will be running a against a problem of their own making.  Of course, President Clinton supported the repeal of some restrictions on investment banking, proving that Democrats acting like Republicans is not the solution – a fact of which our Blue Dog friends will have to be reminded as reform legislation progresses.