This is being pointed to as a validation of the “stimulus” plan:
The oft-criticized stimulus plan boosted the economy in the second quarter by as much as 4.5%, the Congressional Budget Office said on Tuesday.
In a report published the same day as Minority Leader John Boehner’s criticism of President Obama’s economic policy, the CBO said the stimulus law boosted the economy by between 1.7% and 4.5%, lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points and increased the number of people employed by between 1.4 million and 3.3 million.
Of course it boosted the GDP by a sizeable amount. When you pour almost a trillion dollars out of the government bucket and that is part of the calculation of GDP, then naturally the GDP is going to be “boosted”.
The question is, what good did it do. Claims of “increasing the number of people employed” is, as is obvious, a guess cranked out by an economic model.
But look around you. When what the bucket has dumped out drains away, what do we have?
9.5% unemployment – at least at an official level – 1.5% higher than what was promised if the “stimulus” wasn’t passed.
A stagnant economy.
Businesses neither expanding nor hiring.
Car sales – down.
Housing sales – way down.
Consumer confidence – in the tank.
Expanded regulation, increased taxation and a war on business.
Policies that have been described as an “economic Katrina.”
So let the left and the media try their best to make this more than it is – the effect on GDP calculation that absurd levels of governmental deficit spending will have.
Take that out and there isn’t much to shout about, is there?
In practice, that means the stimulus plan is the main reason the U.S. economy grew during the second quarter. The Commerce Department estimates the economy grew 2.4% in the second quarter, a figure most economists expect to be sharply revised lower in a report due Friday.
Uh, no, there isn’t.
One last little point:
The CBO also upwardly raised the cost of the stimulus plan to $814 billion from $787 billion.