While the Wall Street Journal editorial page can always be counted on to cheerlead the flat-earth economics of the Republican Party, on occasion the paper's reporters contradict GOP orthodoxy. And so it is today on the subject of the Obama stimulus package. Just one day after Eric Cantor (R-VA) followed the lead of John Boehner and Newt Gingrich in calling the recovery program a "failure," the Journal's Deborah Solomon reported otherwise in a piece simply titled, "U.S. Economy Gets Lift From Stimulus."
As I noted last month, the $787 billion American Recovery and Reinvestment Act (ARRA) opposed by every House Republican and other Obama administration measures are already paying huge dividends for the economy:
After steep declines of 5.4% and 6.4% in the previous two quarters, gross domestic product fell only 1% in the last three months. And while the ARRA overall added "up to 3 full percentage points of annualized growth in the quarter," President Obama's stimulus helped precisely where it was needed most - rescuing devastated state budgets.
On Wednesday, the Wall Street Journal agreed, concluding "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." While Cantor is urging the program's cancellation, the investments thus far ($84 billion of $499 billion in spending and $60 billion of the $288 billion in tax cuts) are already helping stop the bleeding from the Bush Recession:
Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus.
For the third quarter, economists at Goldman Sachs & Co. predict the U.S. economy will grow by 3.3%. "Without that extra stimulus, we would be somewhere around zero," said Jan Hatzius, chief U.S. economist for Goldman.
Of course, as their cornucopia of lies on taxes, health care reform, President Obama's birth, grandma's government-mandated death and so much more shows, the comical untruth of a statement is no barrier to a Republican repeating it. Contrary to the dishonest claims of Cantor, Boehner, Gingrich and their echo chamber, the stimulus program is not a "dismal failure."
Regardless, that conservative drumbeat will doubtless continue, especially in the Wall Street Journal editorial pages.
(This piece also appears at Perrspectives.)
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