The stimulus is ... working? (No Joke!)

The stimulus is ... working?

Posted Sep 02 2009, 11:06 AM by Kim Peterson

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Filed under: Kim Peterson, economy

 

Could The Wall Street Journal actually be admitting that the federal stimulus is working? That certainly seems to be the case. 

"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," the newspaper reported Wednesday. I wonder how painful this admission is for the Journal, which has been sharply critical of the stimulus package.

Bing: More on the economic stimulus

Economists are starting to say the worst is over, and that the economy is growing above where it would be without a stimulus. The second quarter saw a contraction of only 1%; without a stimulus, that could have been as high as 3.2%. Now, the economy looks on track for positive growth in the third quarter.

Still, some critics say that other programs were more effective than the stimulus. The Federal Reserve bought loads of Treasury debt and mortgage-backed securities, pumping cash into the financial system. The government engineered a massive bank bailout, in part to encourage banks to start lending again.

In fact, much of the stimulus package hasn't even arrived yet. only $60 billion of the $288 billion in scheduled tax cuts has come through, and $84 billion of the $500 billion in spending has been paid, the Journal reported. Stimulus spending is supposed to peak later this year or early next year, the Journal reported.

Still, there appears to be little doubt that the economy is in recovery, and the stimulus -- love it or hate it -- has had a hand in that. But for many Americans still struggling to find a job, it won't feel like a recovery anytime soon. 

Related reading:

More stimulus needed, Stiglitz says

Buffett calls for second stimulus

What if we spent every penny?

America in financial crisis

 

 

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