Liveblogging World War II: July 8, 1940
Fiscal Policy: Chris Edley Is Making Sense--a Long-Term Deficit-Neutral State Aid During Recessions Proposal

"Recovery Summer"

Q: Will President Barack Obama's "recovery summer" convince voters the $787 billion stimulus package is pulling the economy out of recession?

My Answer: The problem is that the stimulus package Obama proposed was about 2/3 the size that Obama's economic technocrats thought appropriate in December of 2008, that the marginal votes needed in Congress--Snowe, Nelson, et cetera--cut its effectiveness down to half and had the bargaining power to do so because every single other Republican thought their job #1 was to make Obama look like a failure, and that the magnitude of the financial shock to the world economy turned out to be about twice as big as we were estimating in December 2008.

Thus we did about 1/4 of the job. It was clear relatively early that we had done about 1/4 of the job. Even on February 15, 2009, Mark Zandi--who had been John McCain's chief economic advisor during the 2009 campaign--was out there publicly saying that it was clear that we had not done the whole job.

Given that we did only 1/4 of the job, it looks like the stimulus has been quite effective: unemployment has stayed under 10%.