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Which Stimulus Promises Should Obama Answer For?

The various attempts to hang any and all perceived failings of the stimulus around Obama's neck have become a bit of a pet peeve of mine. For example, in an otherwise solid piece, the Times notes today that:

In setting forth their case that their policies are improving the economic picture, White House officials like Mr. Bernstein argue that by the end of 2010, unemployment will be two points lower than it would have been had the stimulus bill not been enacted.

But that argument has been compromised by the administration’s own inaccurate forecasting; in January, the Obama team predicted that unemployment would remain at 8 percent or lower in 2009 if the recovery bill passed. Mr. Biden himself conceded last month that administration officials “misread how bad the economy was” before taking office.

But the argument that unemployment would be two points lower than it would have been without the stimulus hasn't been compromised by the administration's 8 percent unemployment forecast. What's been compromised is the 8 percent forecast itself. It's still very likely that unemployment will end up two points lower than it would have been. The only thing that's changed is the "would have been," which looks a lot worse than anyone realized at the time the 8 percent figure came about.

Look, you can criticize the stimulus for being insufficient given what we now know about the economy. And you can criticize the administration for not forecasting the extent of that deterioration. (Though neither did anyone else, really.) But the point of the stimulus was to provide a bump relative to whatever dropoff we actually got. If the dropoff turned out to be worse than expected, then the post-stimulus numbers would also look worse than expected, even if the stimulus was doing everything we asked of it. If you're going to dispute its effectiveness, you need establish how the world would have looked like without the stimulus and show that it isn't improving things by as much as advertised. It's not sufficient just to point out that the topline numbers are disappointing.

--Noam Scheiber