Monday, January 12, 2009

The Fiscal Stimulus Plan Analysis from the Obama Camp

An economic analysis of the Obama fiscal stimulus plan. Remarkable for its even handedness - the work of professional economists not political operatives (what a nice change).

Here is the picture that says it all:

What is scary about this picture is that with or without stimulus, unemployment is not predicted to return to under 6% until 2012.

I think the question is not is it too much, but is it enough? As an economist I would like to see a bit more, but as a realist, I realize that getting it done politically is a challenge and there is no time to waste.

1 comment:

Gregory said...

I think their assessment of unemployment is a little optimistic. Unemployment peaks 4-6 quarters after the economy recovers. Even if economic growth would recover in Q3 2009, unemployment probably wouldn't start to decline until late 2010 or early 2011.