Was the Stimulus "Politically Disastrous"?

The Atlantic's Max Fisher says it is, calling it "hugely important but politically disastrous." But was the stimulus bill, known also as the American Recovery and Reinvestment Act, really "politically disastrous"?

Let's go to the polling. The most recent polling on the stimulus, from CNN in mid-January, found that just 42 percent of respondents still favored the stimulus while 56 percent opposed it -- not great numbers, but also probably not "politically disastrous" (but that's just, ya know, like, my opinion).

Digging deeper into the CNN numbers, the "disastrous[ness]" of the stimulus becomes even less clear, though. According to the survey, a substantial 58 percent majority of Americans believe that the stimulus either improved conditions (12 percent) or prevented conditions from becoming even worse (46 percent). Just 22 percent stated a belief that the stimulus had no effect, and an even smaller 19 percent responded that the stimulus made economic conditions worse.

Far from indicating that the stimulus is "politically disastrous," these numbers seem to indicate that a sizable majority of the American people realize that things could have been a lot worse had the stimulus not been passed by the President and the Democratic Congress. Again, this isn't to say that the stimulus is wildly popular, because it's clearly not. At the same time, it's hard to see how one could argue it to have been a political disaster for the Democrats.

Tags: Economy, Recovery Act, stimulus (all tags)

Comments

17 Comments

Bottom line

No one, except maybe Paul Krugman, is out there making the Keynesian case for deficit spending.  It's like they assume people will just intuitively understand.

As long as Democrats continue to act like a balanced budget is an unalloyed good, even under these economic conditions, public opinion is not going to look very good for us.  Democrats have accepted the frame that government spending is out of control, which means they come off as vaguely embarrassed even by something like the stimulus that they should be proud to take credit for.  It's bad politics.

by Steve M 2010-03-11 03:48PM | 1 recs
RE: Bottom line

In three words, yes, yes and yes.

by desmoinesdem 2010-03-11 05:16PM | 0 recs
Counterpoint

Democrats have a choice: Embrace deficit spending, and cede fiscal responsibility back to the Republicans. Or embrace fiscal responsibility and cut Republicans off at the knees.

I'm not surprised that no great political memes changed with the election of Barack Obama. If anything, they only hardened. But the one exception to this, IMO, is the Democrats' very real ability to steal fiscal responsibility away from the GOP for a generation.

I'm not a huge fan of Krugman. Quite honestly, I think he's a quack. I know how that sounds, me going up against a guy with a Nobel Prize.

But I am concerned about the deficit as a percentage of our GDP. Just as I am concerned about the $2.2 trillion infrastructure deficit. I'm a liberal. I want public works. If you think I have no skin in this game, as an out-of-work Civil Engineer, I rely on that government spending to get me employed again.

I agree with everything you have said, but I also feel that deficit spending plays poorly with independents and surrenders all the ground we gained from George W. Bush.

by NoFortunateSon 2010-03-12 12:19AM | 0 recs
Max Fisher

is a food & travel reporter. I've read a number of his columns for The Atlantic and I question his expertise and knowledge even on food. 

He's entitled to his opinion. But I'll note, he fails to consider the political repercussions of the inverse. 

by Charles Lemos 2010-03-11 04:46PM | 0 recs
the only disastrous thing about the stimulus

was that so much of the money was wasted on things with little stimulative effect. About 9 percent of the cost was for fixing the alternative minimum tax, for instance. That will give some upper-income taxpayers more money to spend later this year, but it wasn't an immediate job-creating measure last year. We could have spent those tens of millions of dollars much more wisely.

by desmoinesdem 2010-03-11 05:15PM | 0 recs
RE: the only disastrous thing about the stimulus

The way congress works - tacking on a whole host of programs onto single pieces of legislation is particularly annoying. But OTOH you have examples like the extra funding for the CDC which was stripped from the stimulus as not being "stimulative" - even though the money ended up being neccessary given the Swine Flu thing.

by vecky 2010-03-11 06:12PM | 0 recs
upper-income? RLY?

The AMT would, through bracket creep, have applied to taxpayers in the $85,000 to $250,000 range. The patch keeps it above that.

Your definition of 'upper-income' is frankly laughable. The patch's definition is closer to accurate.

 

by QTG 2010-03-11 06:21PM | 0 recs
RE: i was attempting to reply to

demoinedem's posting:

fixing the alternative minimum tax, for instance. That will give some upper-income taxpayers more money to spend later this year, but it wasn't an immediate job-creating measure last year. We could have spent those tens of millions of dollars much more wisely.

by QTG 2010-03-11 06:26PM | 0 recs
RE: upper-income? RLY?

No one is saying there should not have been an AMT fix.  The point is that with the artificial cap we had to impose on the stimulus to appease the blue dogs, we could have passed the AMT fix in just about any other bill and used the stimulus for real job-creating measures.

By the way, I doubt anyone wants to argue about semantics, but for the record: $85,000/year is enough to put you in the top 20% of households in this country.  I guess if you think "upper-income" means "rich," then fine, $85,000/year isn't rich, but the majority of the middle class is unaffected by the AMT.

by Steve M 2010-03-11 06:38PM | 0 recs
RE: upper-income? RLY?

They are middle class, mostly 2 earner families, many with kids and mortgages, college loans and future college costs ahead. You and demoinesdem are apparently either too young or too isolated from the demographic to understand that these people are not secure, not rich, and certainly not deserving of the AMT.

It was perfectly a reasonable part of the stimulus package.

by QTG 2010-03-11 06:57PM | 0 recs
RE: upper-income? RLY?

You're not reading.

Also, if you're correct that 98% of the nation is middle-class or below, it would be really hard for anyone to be isolated from it!

by Steve M 2010-03-11 08:42PM | 0 recs
RE: upper-income? RLY?
Current Population Survey (CPS) A joint effort between the Bureau of Labor Statistics and the Census Bureau

Income Levels, Percent of Households

Total  100.0                                          

Under $5,000     3.0                                              

$5,000 to $9,999     4.1                                              

$10,000 to $14,999  5.8 

$15,000 to $19,999      5.7 

$20,000 to $24,999       6.0 

$25,000 to $29,999       5.5                                          

$30,000 to $34,999        5.4                                          

$35,000 to $39,999        5.1                                          

$40,000 to $44,999       4.8                                          

$45,000 to $49,999      4.1                                            

$50,000 to $59,999      7.9

$60,000 to $74,999     10.0                                           

$75,000 to $99,999     11.9                                           

$100,000 and over     20.5

 

I can only guess where you pulled that '98%' statistic from. I'm a fanboy of these guys, though:  U.S. Census Bureau, Household and Housing Economic Statistics Division

http://www.census.gov/hhes/www/cpstables/032009/rdcall/1_000.htm

by QTG 2010-03-11 09:26PM | 0 recs
RE: upper-income? RLY?

1.5% of U.S. households have incomes above the $85,000-$250,000 range you mentioned, according to the exact same Census Bureau.  So you're right, the correct figure was not 98%, it was 98.5%.

And as I already said: "$85,000/year is enough to put you in the top 20% of households in this country."

But for the last time, no one here is arguing against the AMT fix.  No one.

by Steve M 2010-03-11 09:39PM | 0 recs
RE: upper-income? RLY?

According the Obama Whitehouse (I'll continue to provide you links, reciprocation is not required).

http://www.whitehouse.gov/omb/assets/paygo/paygo_by_section.pdf

 

Alternative Minimum Tax.

With the expiration at the end of this year of the current AMT patch, which provides an increased AMT exemption for 2009, the number of AMT taxpayers would rise from about four million to about 30 million. The "current policy projection" assumes that this does not occur and that, instead, the AMT's 2009 exemption amounts and related parameters are continued thereafter, indexed to inflation.

by QTG 2010-03-11 09:54PM | 0 recs
RE: upper-income? RLY?

The AMT fix was probably necessary to corral a few votes anyway. I do wonder if the Snowe-Nelson combine in the Senate would have been clueless enough to let the dropping of the AMT fix to result in an additional $70 billion in spending. But I doubt it.

btw, QTG was not quite correct. The AMT still applies to those making between 80k and 250K... the exemption is only for those below $71K (joint) and $47K (single).

by vecky 2010-03-11 08:39PM | 0 recs
Delusional

The stimulus is just the government kicking the can down the road again and postponing the inevitable. The banks are insolvent and once that becomes general knowledge, the market will crash in a big way.

Many second liens have little value because of the plunge in home prices, Rep. Frank wrote, adding: "Yet because accounting rules allow holders of these seconds to carry the loans at artificially high values, many refuse to acknowledge the losses and write down the loans."

The banks know they can't write down the loans because they are using the inflated values to make it appear like they have more assets than liabilities to prevent the FDIC from closing them down.

All the banks that the FDIC is closing down have 25-40% less assets than they claim on their balance sheets. The largest banks have 7-8 Trillion in assets, so if they are hiding their true assets at a similar rate to the other banks, we're talking about 2 Trillion in assets that do not exist. 

 

 

by tpeichel 2010-03-12 10:35AM | 0 recs
Like/Dislike of the Stimulus . . .

Is, frankly, a crappy way to frame the poll. If some pollster called me and asked if I was happy with the stimulus, I'd have to say "no". Because we needed a much bigger stimulus, focused much more squarely on job creation and less on tax cuts. Of course, I'm aware of the politics of it, and that this was what we could get through congress, but that doesn't make it all I'd hoped for. Plus, the unemployment rate hasn't gone down, which means that the stimulus hasn't really done it's job. (Of course, things would've been a whole HELL of a lot worse without it, but "we're spending 800B to keep things from getting worse than awful" isn't something to be pleased with.)

So, on the "dislike" side, you have the defecit hawks, the Tea Partiers, the Republicans who'll hate everything Obama even mentions in passing, everyone who's out of work (because they won't give a damn until they get a job) and folks like me who think we needed a bigger, better stimulus than the one we got. And yet, that only makes up 56% of the poll responses. Frankly, that's not too bad.

by EvilAsh 2010-03-16 08:52PM | 0 recs

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