Wednesday, January 27, 2010

Proof from the experts: stimulus worked. We need another one.

USA Today surveyed 50 top economists and found agreement among one question: did the stimulus work? The answer is absolutely.

The stimulus package (the American Recovery and Reinvestment Act) reduced unemployment by 0.8 percent -- that's 1.2 million people that would have been laid off without our significant increase in government spending during this nasty recession.

It's common sense: if most businesses and people have less money this year and they buy fewer things, then there are fewer jobs for people to make the products or services that the businesses or people would have bought. There is less tax money coming in to state and local governments, so teachers and other government workers get laid off, slowing the economy down even more since the people who are laid off don't have any money to spend. The way to get out of this slow-down in spending is for the one institution that can spend now to keep people employed to do so -- and that's the federal government. Only DC can spend on things we need -- like clean energy and high speed rail and teachers -- when everyone else is out of money. And by spending money this year and next year, we'll build up our economy so that in a few years when our economy is moving again, we can pay back the loans the fedreal government is taking out now.

Or, we can say that "all government spending is bad" and then we'll fire more people and slow down our economy even more.

Ask the experts -- the economists who study how to get more people working. They all agree, according to this USA Today news article -- that the stimulus was successful and that the federal government should pass another one.