Republicans say Obama's policies have failed to dent unemployment, a political sore spot for the president that has helped drag down his approval rating to 50 percent or lower.Why did the reporter throw in the sentence that I have highlighted? Why not put in this sentence: "However, many independent economists have said that the measure did little or nothing to fight the recession"? Economists are divided on the effect of the so-called stimulus package, with some believing that it helped and others believing that it did nothing or even made the recession worse. The only information this sentence contains is that the reporter believes the president and the Democrats are the good guys in this dispute and the Republicans are the bad guys.
Obama's $787 billion approved last year by the Democratic-controlled Congress was largely rejected by Republicans. However, many independent economists have said the measures helped avert an even deeper recession.
Recalling the stimulus fight, Obama said he refused at the time to give in to "partisan posturing."
Economists do not and cannot know what would have happened if the stimulus package had not been passed. Economists are not using current events to test their theories, but are using their theories to interpret current events. Those economists who believe that the stimulus measure helped hold that belief because their theory tells them that fiscal policy works. Hence, they conclude that without the stimulus the economy would have done worse. However, there are other economists who believe that fiscal policy is either ineffective or unpredictable in its effects, and they see no reason to believe that the economy would have done worse without the stimulus package.
Because economists cannot re-run history several times to see what would have happened with various policies, macroeconomics has long been an area of considerable disagreement among economists. However, the field is not totally without progress. Occasionally the results of policies are so dramatic that a theory loses plausibility. For example, the unemployment and inflation results of the 1970s killed the idea that there is a stable Phillips Curve. Sometimes examination of data from many years shapes what is plausible. For example, no one still believes that fiscal policy multipliers are anywhere near what the economists of the "New Economics" thought they were in the 1950s and 1960s. Even the Obama administration's economists were using government spending multipliers that were under two.
On a non-economic note, when has this president ever refused to give in to partisan posturing? Campaigning is the one thing he does really well.