Joe Tries to Spin, But Ends Up Twisting in the Wind June 15, 2009Posted by geoff in News.
In the comments, lauraw linked to Joe Biden’s spin on the economic predictions for the stimulus package:
Vice President Joe Biden says “everyone guessed wrong” on the impact of the economic stimulus.
Really. Let’s look back about 4 months and try to remember who was guessing what:
- Obama reminds GOP in stimulus meeting: “I won” (Hot Air): 1/23/09
- House passes stimulus plan, but with no Republican votes (McClatchy): 1/28/09
- Pence Opposes Democrat Stimulus Bill: “It Won’t Work”: 1/28/09
- Economists say stimulus won’t work (St. Louis Post-Dispatch): 1/29/09
- Analysis: Stimulus Won’t Jump-start Economy (AP): 2/13/2009
- Sen. Cornyn: Stimulus Won’t Work (Fox): 2/13/09
- Republican Governors Step Up Attacks on Obama Economic Policies (Bloomberg): 2/23/09
And among the highlights to the opposition to the bill, we had 200 economists taking out an ad in the New York Times saying it wouldn’t work, all GOP representatives voting against the bill, and all but 3 GOP senators voting against the bill. [And as Joey Buzz points out in the comments, I’d forgotten to mention the Tea Paries, which involved hundreds of thousands of American citizens of all political affiliations.]
Seems like more than a few people lacked faith in the impact of the economic stimulus, and the only people who “guessed wrong” were its ardent supporters. There have been few cases in politics where one party so completely and unequivocally owned a piece of legislation. Joe is a desperate, desperate man to even try to revise that history.
But that’s not all folks – he kept on going. I doubt anybody in the MSM is going to take him to task on this part, so we’ll have to do it here:
Biden says White House economists used standard formulas to estimate that 3.5 million jobs would be saved or created under the plan Congress passed earlier this year.
What’s wrong with that? Let me put it this way: glorifying their breezy use of rules of thumb with the term “standard formulas” is like calling a series of guesstimates a sophisticated computer model. Oh. I guess that’s what they did.
Anyway, here’s how they did their analysis, which produced the blue portions of the graph at the right:
- Take spending in Quarter 1, multiply by a factor to get its effect on GDP in downstream Quarters. So for its effect on Q2, we multiply Q1 spending by 1.05 and add it to Q2’s GDP. Then we multiply Q2 spending by 1.05 and Q1 spending by 1.24, and add them to the baseline GDP prediction for Q3. And so on. The multiplying factor changes depending on how many Quarters downstream of the spending you are, but levels off after about 2 years.
- Now we have a crude, crude estimate of the effect of stimulus spending on GDP. Then we get really scientific and say that 1% of GDP increase = 1 million jobs. If that has the feel of a complete swag, then I’d say you’re following this very well.
And that’s it.
What? You were expecting more? You thought that it would take more than an hour and the back of an envelope to make the calculations to justify an $800 billion spending package?
Yeah, me too.