Stimulus Gets B-Minus Grade
ABC News panelists disagree whether stimulus was vital but argue it didn't fail.
Feb. 18, 2010 — -- What kind of grade do experts give the economic stimulus bill following the one-year anniversary of its enactment?
We put that question to our ABC News panel of economists. What came back: no "A's" for Washington -- but no "F's" either.
The average grade was a B-minus, with one economist saying it really might be more accurate to grade it "incomplete."
Most of our panelists think the economy would be worse today without the big aid package, which totaled $787 billion and was signed into law by President Obama on Feb. 17, 2009. The bill, known as the American Recovery and Reinvestment Act, included money for tax cuts, infrastructure projects, education and aid to state and local governments.
"The stimulus worked," said Stuart Hoffman, chief economist at PNC Bank. Without it, "the unemployment rate would probably be closer to 11 percent" and the economy might not have grown at all last year.
Mark Zandi of Moody's Economy.com thought the nation would be "still in recession."
"It played a significant role supporting recovery," said economist Diane Swonk of Mesirow Financial.
Not all the economists who responded to our survey agreed the stimulus was necessary.
"Throwing a trillion dollars at anything will move it," said Standard and Poor's David Wyss, "but the recovery would be beginning and the unemployment rate nearing a peak" without it.
"The economy would probably be recovering," argued Jay Bryson of Wells Fargo, just maybe not "as fast as it is."
Stimulus 'Stacked With Pork'
Both those who believed the stimulus was vital -- and those who did not -- agreed that a better-crafted bill could have had a greater economic impact.
"Fiscal stimulus has to be, to quote Larry Summers, 'timely, targeted, and temporary' " Wyss said. "This failed all three tests, with most of the money still not spent."
"The government has to work overtime to make sure that money gets spent," agreed Bryson, while Zandi added that we've learned "there is no such thing as shovel-ready infrastructure."
"So much was just pork, earmarks, etc.," said economist William Dunkelberg of the National Federation of Independent Business.
Swonk agreed: The stimulus was "stacked with pork barrel," she said.
Still, as she looks at the nation now, it's not the economy that distresses her most.
"The political system seems in even worse condition than the economy," she said, "which is a dismal view."