The Unmysterious Unemployment Rate May 19, 2009Posted by geoff in News.
An earlier post, which contained a plot of actual unemployment vs. what was predicted by Obama’s economic team, caused quite a stir in the blogosphere. But apologists and doubters had one universal reaction:
“How do you know that it wouldn’t have been worse without the stimulus?”
The answer is very simple: because the stimulus hasn’t happened yet. And everybody knows that. But I don’t think people understand how true it is. It is this true:
We’ve barely spent anything so far, and everything we have spent (inset graph) has been devoted to minimizing suffering via social services, not stimulating the economy. So the fact that the unemployment numbers have increased far beyond the administration’s predictions are unsurprising.
Nobody would claim that a $787 billion stimulus package would never create any jobs – eventually I’m sure that it will. But as a package meant to stave off the increase of unemployment in the near term, the stimulus has been a failure.
[Note: This post does not address the effects of the tax relief provisions of the ARRA.]