Glad we spent that stimuls money

It does have an effect necessarily. I'm saying the underlying issue is much more problematic than that though. Honestly the stimulus would have been better if they just told every american that they would pay off $800B/$300M in debt. That would have sped up the massive deleveraging that needed to take place.

I agree 100%.  However we as a country could have been $800 billion richer and honestly not in any worse of a situation.

I always thought the stimulus was a HUGE mistake.  Both the Bush version and the later packages put through by the D's.

Lets use the analogy of someone with an adult child who ran up a bunch of debt.  House and cars are going to be repossessed etc...

As a parent you can "bail them out" and give them money to keep them from experience the pain of having to deal with the problem they created or you can invoke some tough love and let them deal with the pain and lose their butts.

If you bail them out they learn nothing and 2 or 3 years down the road they've got all the original debt and come back with even more debt in the same situation.  Versus the other option they are forced to learn to live within their means and not take financial risks.

Would it have been horrible if the banks had failed in 2008?  Yes it would have, but I will bet money that the second failure that's coming in the next several years is going to be far more painful and there will be nobody to bail us out.

btw, I saw this add on TV last night and it made me laugh.  I'm betting there will be a lot of adds like these coming out in the next 4 months.

http://www.youtube.com/watch?v=UjWc9cX7dQc

It would have been worse.  -kind of unarguable.  I think you may be forgetting the state of our economy in late '08 and early '09.  The Obama Admin's economist team underestimated how bad things were- and later retracted those curves which you display.

Nearly 40% of the 'stimulus' was tax cuts, FWIW. 

Everyone underestimated how bad it would be. I was in school still and I asked my finance professor what if the economy still sucks in a few years (we were talking about RoR and how the market always returns 10%, etc), he said the average recession is only 3 quarters and then we go back to 3-4% growth. He, like everyone else states this as if it is a proven fact that the economy MUST return to normal because it always does.

Japan has had 2 lost decades now and it is still ongoing. We are going on 12 years ourselves and it won't get better without massive, radical changes to our country that will never happen. That or WW3 will break out and "save" us.

kind of un-provable too

How can you draw your conclusion? Since the Recovery Plan was implemented you don't know how the country would have responded with no recovery. Unemployment could have risen to 9% as the graph showed, but then entered into a massive which would have driven it up to 15%, no way of knowing, therefore you cannot draw conclusions.

x2. If anything, it looks like the light blue curve ("Without recovery plan") was still grossly underestimating how bad things would have got in October 2009. And the last two red dots show nearly a 3% difference between the official numbers and the estimate. 

It's as if you have surgery and I give you some pain meds. You have some break through pain and complain that the pain meds did no good. Whereas if you had no meds, the pain would have been worse. You really can't prove the effect of the stimulus one way or the other with this graph.

Thanks... this is what I was coming to post.  There always seems to be an excuse for being wrong.  They were wrong.  They spent money foolishly.  It didn't work.

Would things have been worse if they did not spend it?  I (and lots of economists) say no.

The difference is that you charged me $800 billion for the pain meds and PROMISED me it would make most of the pain go away.

Then, the pain was WORSE than you ever told me it would be even w/o the meds.

So now I'm in agony AND I'm broke.

Really......we just charged your kids the $800b.  You don't have to worry about a thing!

This "recovery" will contiinue to limp along and things will not get better for a long time or until we are willing to actually feel the pain the self-inflicted wounds caused. Neither we nor Europe want to take the lessons the Japanese lost decade taught us. We think we can do it right, do it better than they did, but we do the same thngs and get the same results. We want the European style wefare state to keep us from paying the price of our own mistakes. It will not work. All we do is peel the bandaid off slowly till the Pt wiggles and squirms a little then we slap it back on and try again in a little while. Until we all admit we had a hand in driving the bus off the cliff and we accept that it's gonna hurt all of us to fix it we will continue to piddle around and get what we deserve.

You could absolutely be right, but now because of the "fix" we put in place we're staring down the barrel of a far worse problem.  So us kicking the can down the road "hypothetically" made things better the last 4 years, but in another 5 or 10 years (maybe sooner) we're going to have a debt implosion far greater than it ever would have been in 2008 with nobody to bail us out.

Remember, we were all fat dumb and happy back in 2008 and all of a sudden boom, OMG, all the banks are going to fail.  What's the next big surprise that none of us know about?  Inflation? Student Loans? Europe?  I don't know, but I do know that something's going to give.  The rest of the world isn't going to let us continue to print money forever to finance our reckless spending and trying to falsely prop up our economy.

Think about it.

• We had the dot com boom that falsely inflated our economy.  what happened?  CRASH 2001
• We had the mortgage debacle pumping billions of dollars into our economy falsely inflating it.  what happened?  CRASH 2008
• Now we have the US Government pumping billions of dollars into the economy falsely inflating it.  what do you think is going to happen?  CRASH!!!  it aint rocket science. 

Wait, your Dr. promised you, so it has to be true? You must believe everything politicians tell you too huh. I know you can come up with a better analogy than that

Seriously though, nothing Obama or Romney have proposed (what have either of them really proposed anyway?) is going to do much of anything to fix this. 

This is a little bit misleading. The government isn't "pumping" more money into the economy right now beyond what they were already planning on doing prior to the financial meltdown (okay maybe a little more). The budget has increased by $800B since 2008, whereas the budget increased by $500B in the previous 4 years. This is mostly due to annual increase in spending that are already factored into the budgets. The deficit is much higher than before because spending is still rising as it normally does, but the revenues have fallen below the levels they were in 2004. 

I never believed him to begin with.  However that's what the President is supposed to do.  Tell the country the truth.

People have to be held accountable to their promises.  So he lied to us.  Fine.  Vote him out.  The next guy lies, fine.  Vote him out too.

Now you're speaking my kind of language.