Question by haley: Your response to New Yorker Article on stimulus?
The congressional budget office estimates that it reduced unemployment by somewhere between 0.8 and 1.7 percent in the recent months. Mark Zandi and Alan Blinder, economists from Moody’s and Princeton, argue that, in the absence of a stimulus bill, unemployment would have risen above eleven percent and the GDP would have been almost half a trillion dollars lower. Economically, what made the bill most effective was exactly what made it unpopular: instead of giving lump-sum tax refunds (which studies show get hoarded rather than spent), the government decided not to give individuals their tax cuts all at once, instead refunding a little on each paycheck. The tactic was successful at increasing consumer demand, but had a big political cost: many voters never noticed that they were getting a tax cut.

Billions of dollars that went to state governments were crucial in helping the states avoid layoffs and spending cuts, but politically it did little to get much notice, because saving jobs just isn’t as conspicuous as creating them.

The stimulus also backloaded, so that only a third was spent in the first year. This reduced waste, since there was more time to vet projects, and insured money would keep flowing in to 2010, lessening the risk of a double-dip recession. But it also made the stimulus less potent in 2009, when the economy was in dire straits, leaving voters with the impression that the plan wasn’t working.
Polls show that a sizable majority think the stimulus bill did nothing.

**Looking back to the 1929 crash, when the federal reserve and government did NOT bail us out, it lead to the Great Depression. Franklin Roosevelt had to set up public work forces to drag us out of it. In that case, was it the right move? Do you believe we would have let the recession spiral in to a depression with no bail out of big business/small government/tax cuts? Or that with we should let big business fail/have tax cuts/ and have more personal freedom without government interference?

Thank you.
‘I think the New Yorker will pull any factoid they can out of their @sses, no matter how spun or minute, just to protect their dear savior, as he runs the rest of us into the ground on a daily basis.’

I’m confused, what are you rejecting in the article?
@Jaker

thank you for the response and interesting article! I actually enjoyed reading it, although I admit I skimmed through the end.

Yet I ask, after reading this:
‘It wasn’t merely that Hoover spent a bunch of money. He spent it on just the types of things that we associate today with Roosevelt’s New Deal. For example, he signed off on numerous public-works projects, including the Hoover Dam. Of particular relevance today is the Reconstruction Finance Corporation (RFC) established under Hoover, which quickly injected more than $ 1 billion to prop up troubled banks that had made bad loans during the boom years of the late 1920s—and this was when $ 1 billion really meant something.

It is true that Hoover eventually blinked and raised taxes in 1932, in an effort to reduce the federal budget deficit. ‘

in which case you support raising taxes?
@ White Bear

I agree somewhat. I am pretty center – so although I believe not injecting money would have led to a financial crash, it does not seem fair to reward Goldman Sachs – the very agency that got us in to the recession – with money. ALTHOUGH many companies who took money in the bailout paid the money back. My question: would you rather face the possibility of a depression (which any fair person would admit is possible) or not bail out companies and allow corruption to sink with them (which, when new companies take there place, will inevitably be replaced with more corruption?)
@ Donald Duck

Yes! I love that song. When I went to high school they used to play it in between classes.
I am genuinely interested – not trying to attack, just playing devil’s advocate to a few of you. How would no bail out and tax cuts NOT lead to a financial disaster?

Best answer:

Answer by Apathetic voter
Don’t bother talking to Republicans. They claim that the Democrats destroyed the economy in less then a year and that it can be fixed within a week.

Know better? Leave your own answer in the comments!