Though I will continue to criticize those who use creative accounting to claim that TARP “worked,” I cannot say the same for the stimulus package. You can legitimately claim that the stimulus was too small – it was, and we’re facing the political consequences of that to this very day. What you cannot claim is that the stimulus didn’t succeed in its (too limited) aims – to create or save millions of jobs, and to lay down long-term investments for the future. You would be wise not to accept everything in a White House report on a White House program, but this is largely correct:
The massive economic stimulus package President Obama pushed through Congress last year is coming in on time and under budget – and with strikingly few claims of fraud or abuse – according to a White House report to be released Friday [...]
By the end of September, the administration had spent 70 percent of the act’s original $787 billion, which met a White House goal of quickly pumping money into the nation’s ravaged economy, the report says. The administration also met nearly a dozen deadlines set by Congress for getting money out the door.
Meanwhile, lower-than-anticipated costs for some projects have permitted the administration to stretch stimulus money further than expected, financing an additional 3,000 projects, according to the report.
Despite the speedy spending, the report says that stimulus contracts and grants have so far been relatively free of the fraud charges that plague more routine government spending programs. Complaints have been filed on less than 2 percent of awards under the program.
Now, you can credibly argue that a program meant to stimulate the economy by raising demand coming in under budget is a bad thing. But from a political standpoint, the stimulus was managed carefully and responsibly, as it had to be. The waste and fraud charges became a dog that didn’t bark. And the money got out into the economy in the manner prescribed.
Because of the minimal nature of the funds, it would have been better if more of the programs in the stimulus were devoted to direct jobs programs like the TANF Emergency Fund, a huge bang-for-your-buck program that created 250,000 jobs with just over $2 billion in funds per year. Now that program has been terminated, which will lead to thousands of unnecessary layoffs. The future of stimulus needs to be in programs like this, including bringing the TANF Emergency Fund back on line.
What we don’t need are contractionary measures that will inhibit growth and paradoxically increase the deficit. Only job creation will balance the budget.
The stimulus actually proves that point, and more Democrats should be crowing about it, while insisting that more gets done. It’s a tricky two-step, but also a necessary one.
UPDATE: Let me agree with Matt that the future policy I’d most like to see is a mechanism to stop the anti-stimulus from happening in cash-strapped states that have to cut services or raise taxes to balance their budgets. We need some kind of automatic stabilizer program to counteract that. I know I wrote about that back in 2009, but I can’t find it at the moment.