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The stimulus is ... working?

Posted Sep 02 2009, 11:06 AM by Kim Peterson
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Tax rebate © Peter Beck/CorbisCould The Wall Street Journal actually be admitting that the federal stimulus is working? That certainly seems to be the case

"Government efforts to funnel hundreds of billions of dollars into the U.S. economy appear to be helping the U.S. climb out of the worst recession in decades," the newspaper reported Wednesday. I wonder how painful this admission is for the Journal, which has been sharply critical of the stimulus package.

Bing: More on the economic stimulus

Economists are starting to say the worst is over, and that the economy is growing above where it would be without a stimulus. The second quarter saw a contraction of only 1%; without a stimulus, that could have been as high as 3.2%. Now, the economy looks on track for positive growth in the third quarter.

Still, some critics say that other programs were more effective than the stimulus. The Federal Reserve bought loads of Treasury debt and mortgage-backed securities, pumping cash into the financial system. The government engineered a massive bank bailout, in part to encourage banks to start lending again.

In fact, much of the stimulus package hasn't even arrived yet. Only $60 billion of the $288 billion in scheduled tax cuts has come through, and $84 billion of the $500 billion in spending has been paid, the Journal reported. Stimulus spending is supposed to peak later this year or early next year, the Journal reported.

Still, there appears to be little doubt that the economy is in recovery, and the stimulus -- love it or hate it -- has had a hand in that. But for many Americans still struggling to find a job, it won't feel like a recovery anytime soon. 

Related reading:

More stimulus needed, Stiglitz says

Buffett calls for second stimulus

What if we spent every penny?

America in financial crisis

 

 

Comments

 

Does not compute . . . . How is the stimulus responsible for the recovery when it hasn't arrived yet?

Tell us which particular stimulus spends have caused this turnaround and how.

t4bb,

exactly, it's working but they haven't spent the bulk of it and they need more. Liberal economics. Of course if the government keeps spending money (our money) some economic growth will occur. Money grows the economy. Low interest rates and low taxes also make money available. Where are the jobs? How's the foreclosure rate? Who's paying for this?

What stimulus ???? You mean we the tax payers who owe the banks , owe the auto industry and whom ever . Instead they give the money to the industires so they can give themselves raiases and bonuses . When the Stimulus was first released why didn't they give 1 million to every tax payer and or household , have them pay off thier homes and thier car loans ... thus the bank failures and auto failures is fixed . Have the tax payer show proof of what was paid off inckuding all medical bills ect. , that money would be tax free because it is putting money back in the economy . Then what ever is left tax it at 50% say , and use that money to pay for the goverment ran health care . Its so simple and that would cure most  all of our problems . This would let our fearless leaders in Washington handle the other situations with our babes fighting wars we don't need to be in . Get our babes out of there bring them home to protect our borders and our airways , get all the illlegals out prolems  solved . For when we do finally leave iraq and teh otehrs where there are conflicts going on there is just going to be civil unrest and war between them seves anyway so whay are we there ? Its all common sense , instead we have these so called college educated idiots running our country when it just takes some common sense , a little american pride and knowledge .

Sorry Kim,

I'm with the others.  The stimulus can't be working if only 10% has been put out there.  You can't spend your way out of debt.  The cradle to grave theory just does not work.  You offer small buisnesses incintives, not tax increases and threats of more government intrusion.  The regular Joe would like health care premiums reduced, but does not want any part of socialized heatlh care.  Try your rehearsed marching order blog on someone else.

I'm on board with most everyone here.  The stimulus money remains largely unspent so it is obviously not responsible for whatever turnaround is occurring.  Even so, there are those in chairman Obama's administration who are arguing for another stimulus handout.

Government has taken money from taxpayers and spread it around for all kinds of give away programs  from bailouts and  pork, to rebates. Sure car sales were up for 1 quarter due to the rebates but that was artificial demand that didn't even sustain any momentum into the following quarter. It will probably hurt the 4th quarter as those that would have bought in the 4th quarter bought earlier due to the incentive leaving a vaccum in its place. As a taxpayer it would be more palatable to have our money spent on something more useful like new roads, bridges and parks. So far the stimulus has only benefitted a few and created zero sustainable non-government jobs. The only positive I see out of the stimulus is that is has stabilized  the financial industry. But no more "stimulus". Tax cuts would be more effective in long term real growth.

Hey Berny,

If we gave everyone a million dollars like you suggest then the dollar would be worthless! You want to punish me for being responsible and living within my means?  It isn't the governments place to provide us with healthcare, the problems with the economy started when the government started playing a role in the banking and housing industries.

"there appears to be little doubt that the economy is in recovery"  Among economists with millions of dollars, or the overall population who have no job, a shrinking retirement, or a hacked social security check?

This is why America is great----we have such a diversity of thought and ideas.  It is what our forefathers wanted-----debate                   but where is the debate--both the President and Congress are changing our playing field without debate!  Ombama is trying to change America into a socialized State.  I'm quite fearful that things are going to get a lot worst.  I'm not recommending watching Glenn Beck, but he is raising questions about our government that needs to be looked at.  I do think our economy is coming back----America is great but the hole we're digging keeps getting deeper and deeper.  We'll have to buckle our belts a few knotches.

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