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5 Ways The Stimulus Saved And Remade America

Memo Pad Politics

5 Ways The Stimulus Saved And Remade America



The party that still thinks the Bush tax cuts (which resulted in the most negligible job creation in decades) and the Iraq War (which resulted in the Iraq War) both worked wants you to believe that the stimulus failed. And they’ve been making that argument since before the American Recovery and Reinvestment Act even had a chance to work.

This strategy of asserting — despite all the evidence — that the president’s first major accomplishment did not succeed was so successful in the 2010 elections that Republicans are still doing it five years later on the anniversary of the law’s signing, and few Democrats are willing to stand up for the effort that helped blunt the worst of the financial crisis.

“The standard Republican talking point is that it failed, meaning it didn’t reduce unemployment,” economists Betsey Stevenson and Justin Wolfers wrote in 2012. “Yet in a survey of leading economists conducted by the University of Chicago’s Booth School of Business, 92 percent agreed that the stimulus succeeded in reducing the jobless rate. On the harder question of whether the benefit exceeded the cost, more than half thought it did, one in three was uncertain, and fewer than one in six disagreed.”

And beyond rescuing the economy from a greater depression, the stimulus helped remake America, as Time‘s Mike Grunwald explains in his must-read narrative of the law’s enfolding, The New New Deal: The Hidden Story of Change in the Obama Era. With lots of help from Grunwald — whose most recent reflections on the law appear in “5 Years After Stimulus, Obama Says It Worked” — here are five ways the stimulus saved and remade America’s economy when we needed it most.



  1. Independent1 February 17, 2014

    Below is the link to another article based on Michael Grunwald’s research on the stimulus that expands a bit more on what the green energy aspects accomplished:

    Obama’s stimulus package was a ginormous clean energy bill, says Michael Grunwald

    Here’s an excerpt:

    Obama promised that he would double renewable power generation during his first term, and he did. In 2008, people had the sense that renewable energy was a tiny industry in the United States. What they forget is it was a tiny dead industry — because these wind and solar projects were essentially financed through tax credits, which required people with tax liability, and everybody had lost money, so nobody needed [the tax credits]. By changing those to a cash grant, it instantly unlocked this industry. Another thing that’s helped to create the wind and solar industry were advanced manufacturing tax credits, which were a gigantic deal. I think there were about 200 factories that got these credits. The classic example is Abengoa [Solar], which had shut down projects in Illinois, Texas, some other places. The day the stimulus passed, their chairman announced they were pouring $6 billion into U.S. projects.

    Here’s the link to the entire article:


  2. disqus_ivSI3ByGmh February 18, 2014

    Remember, Jason, the “Party-of-NO” has never allowed facts to interfere with their claims of “truth”.

  3. johninPCFL February 18, 2014

    Of course, once a few years have passed and the real effects are more well known by the American people, the GOP will fall all over themselves reminding us how they controlled Congress when it was passed, and Obama “just signed it”. Kind of like how the Seals got binLaden, and he “just OK’d it”.

    1. Allan Richardson February 19, 2014

      Remember when GWB was Governor of Texas? On the campaign trail for President, he managed to TAKE CREDIT for an education bill that was passed OVER HIS VETO! The very definition of CHUTZPAH!

  4. Kurt CPI February 18, 2014

    This is an issue that should not be partisan. For all the statistical smoke and mirrors (and yes, the Obama administration has their fair share), the deficit increase has NOT slowed nearly as significantly as the President insists. “Quantative Easing” and the “Selling of debt” IS deficit spending @ $80B / mo (almost 1trillion per year). This, along with policies designed to put that money into circulation have a benefit to the tune of “negative interest” when combined with other incentive and tax breaks. So who most benefits from stimulus and QE? Yep, Wall Street. No matter what direction the spin, two things remain truths: 1) Government can’t legislate prosperity. 2) You can’t borrow your way to prosperity. Comparing our lesser economic crisis with EU countries who’s debt to GDP are over 100% and saying we’re not doing as poorly is not only an entirely predictable mathematical consequence of our better initial financial position, it’s also a pointless statement. Looking at Canada in the 1990’s, it was indeed Austerity that brought them out of their more isolated EU-type financial crisis. They now have one of the strongest economies in the world (and without giving up universal healthcare). The final truth is that at some point, somebody has to pay the piper. Get ready.

  5. Rodger Malcolm Mitchell February 18, 2014

    The stimulus helped, but it should have been much larger. See: mythfighter.com/2012/09/01/what-is-stimulus-and-why-does-it-always-work/

    1. Allan Richardson February 19, 2014

      The same thing happened in the 1930s. The New Deal helped a lot also, but by itself it wasn’t big enough, because Congress, and even FDR himself, were too timid to spend what it took. After Pearl Harbor, even the Republicans were willing to spend even more than FDR dared to do for the New Deal. And history shows that the economy boomed during and after the war.

  6. Angel Perea February 18, 2014

    THE INCONVENIENT TRUTH; As a student of US History, these republican clowns in congress are conducting the same economic policies that Hebert Hoover conducted in 1928 that turned into a long economic depression. Their obstruction has sabotaged any efforts to revive our USA economy that was destroyed during 2001-2008 war creation years and the giveaway tax breaks for the wealthiest! This has created the same great income disparity like it did then! If you disagree, FACTCHECK IT! Get informed and stamp out ignorance! Many Middle Class Americans are needlessly suffering! This is not about political parties; it is about the future well being of our country.

  7. Dominick Vila February 18, 2014

    There is no question that President Obama’s economic policies to stimulate the economy, and Bush’s TARP, helped prevent the unthinkable. However, the focus now must be on strengthening the economy, achieving sustainable growth, and creating jobs. Cleaning up the mess we inherited in January 2009 is fine, but at this point the focus must be on the future rather than the past.

  8. charles king February 19, 2014

    In management of a information system (1) thing you learn how to (Critical Think) and that is What? the Obama Admin. bought to the table. When? you have a crissis at hand (you drop back and Punt) put the ball in your opponents hands if they except the ball then the game continue but you do not quit playing like the Republican Party did, there is just no excuse for this let down. What? has to be done Now is to teach these A**H***S a lesson and VOTE them out of office and keep them out until they learn that MONIES can not buy your Democracy and this country is For and Of, and By the People Not some of the People, meaning (Money Can Not Buy Your Love) Thank You are the magic words in my book. I Love Ya All. Check-out Webster’s Dict. Democracy VS Plutocracy . Mr. C. E. KING

  9. FT66 February 19, 2014

    Folks, I think we have a bad disease which is roaming around and needs a cure, and that is short memory. Who can forget the 2008 economic meltdown even if you are a republican? Pres. Obama deserves all the credits for rescuing the economy. Yes he does.

    1. CPAinNewYork February 19, 2014

      I voted for Bush the first time and have been a registered Republican since I registered to vote, but I have voted Democrat ever since it became clear that the Republicans are responsible for the 2008 meltdown and the Iraq phony war. They’re not only a pack of thieves, they’ve got blood on their hands. To make matters worse, I think that they are a mean bunch of bastards who want to kill democracy in America.

  10. howa4x February 19, 2014

    Republicans left the economy in free fall, loosing 40k jobs per month. They had no answer other than to bail out the banks that caused the meltdown. Then they tried to throw roadblocks in front of everything that was tried to help the middle class. The worst part of what the republicans did, in their home states, was to pose for pictures in front of hwy signs that proclaimed that the reconstruction was being paid for with stimulus money. That takes nerve

  11. Dominick Vila February 19, 2014

    Let’s not forget why the GOP is claiming, against evidence and logic, that what was done to help the impending collapse of the U.S. economy, announced publicly by former President Bush in 2007, has very little to do with facts, and a lot to do with the need to deflect attention from their dismal record and lack of vision.
    In addition to the economic malaise that started in 2007, two unnecessary wars, 9/11, twelve terrorist attacks against U.S. diplomatic facilities, global upheaval, dismal job growth, and loss of confidence at all levels of our society, it is evident that what the GOP has in store for the future is a sequel to what we just left behind. We dodged a bullet when we elected President Obama, and when he implemented economic stimulus policies, which along with Bush TARP, prevented the unthinkable, we may not be so lucky if we allow the GOP to do the same again.

  12. Eddie Farris February 21, 2014

    I don’t like trashing the other party because I know Democrats have their downfalls as well as the Republicans however if my memory serves me correctly at the end of both Bush #41 and Bush #43 each brought terrible downfalls to the economy especially the latter one in which started in 2008. I think Jeb Bush would have done better than his brother however it is time for the Bush family to give up on politics! They have 2 BIG STRIKES thus far! We don’t need another! On the Democratic side Hillary Clinton is like the most qualified and experienced person I can think of to take the reigns from Obama. She has a resume’ even more lengthy than her husbands. She is all of the following:
    Wellesley College Scholar
    Watergate Hearings during Nixon Years
    Goldwater for President Campaign
    Arkansas 1st Lady
    Attorney/Advocate for Women and Children
    1st Lady of The United States
    United States Senator from New York
    Served on the Powerful Senate Armed Services Committee
    2008 Campaign for President of United States
    U.S. Secretary of State (visited 184 countries – more than any other)
    There is so much more that I could add! Her resume’ is remarkable and she deserves to be President, I think she would work hard every day to serve our country well!

  13. DurdyDawg February 23, 2014

    All political parties are alike, what makes the Dems more trustworthy is their attempt (at least) to include all Americans in their quest for progression and prosperity. They may all be cut-throat but the liberals seem less inhuman when it comes to helping the poor and elderly. I’ve always leaned toward the Democratic party, not because I thought the Republicans were evil and uncaring but no longer and through the decades they have become that which I thought they never were. The only true path to prosperity is keeping the masses happy in the work force.. Stifle that and the profits are lessened and from it the job makers maintain their financial status quo and all suffer but the wealthy WHO it seems, favors conservatism..

  14. CommonSense March 8, 2014

    I realize “The National Memo” is a left of center publication, but WOW, talk about denial of history and the brutal facts. Both parties have become so far removed from politics of the past that it is the reason I’m now an independent. Democrats and Republicans of the past were at least civil and able to reach compromise to achieve goals. It begins at the top. The President sets the tone of cooperation and compromise. I’m thinking Ronald Reagan and “Tip O’Neil. Bill Clinton and Tom Foley/Newt Gingrich. I mean even George W was able to work with Nancy Pelosi. So what happened in Washington to arrive at a cross roads of such acrimony and contempt for members of the other party. It starts with leadership. Regarding this article on Republicans saying stimulus under Obama has not worked is sort of true, but with conditions. I think it is agreed that 911 changed America (forever) unfortunately. Unfortunately for the worst. It resulted in a lot of stupid knee jerk decisions by the Bush administration and Congress. Formation of TSA and Homeland Security which has turned into an out of control monster agency. A rush to invade Irag to name a couple. I’ll agree with the article on those points. There were many other common sense approaches. Regarding the recovery under Obama? What a disapointment. Here’s a guy that took office with such high political debt and personal agenda’s to accomplish he completely blew past the most basic of all (experienced) executive decision making qualities. Specifically, sitting back and analyze the state of the country which at the time was in financial system collapse, shedding nearly 750,000 jobs a month. Nope, instead he immediately began work on Obamacare, approving Solydra (which went bankrupt) which was on hold under the Bush’s Dept of Energy becuase of concern it may not make it. He should have said, “you know, I better put some things on hold for the moment and focus on turning this country around and not passing legislation that is going to hinder a recovery”. He did not. Read next post for causal factors not all Obama’s fault.

  15. CommonSense March 8, 2014

    Read the below post first….it is long but sparks thought. True, Obama did not cause the current recession. It is debatable if his actions and policeis have extended it longer than need be. Wall Street, the banks, the Fed, Fannie Mae and Congress working together caused it. In 1998 under Clinton the banks convinced Congress to repeal the Glass-Stegall Act which Clinton signed. This was a factor. Glass-Stegall was passed during the Great Depression. It was short of a circuit breaker placed on Bankers basically not allowing them to take savings and bank funds to invest in the markets. So that safety feature was removed. Then during the Bush administration their were further changes to the Community Redevelopment Act. Remember, this was passed by Congress in the 70’s to create incentive to develope and improve the depressed inner cities. It has been tweaked over the years. Bush was pushing hard for affordable housing to all Americans. As such FANNIE MAE and HUD were pushing banks to encourage lending to the poor and (identified) minorities. This is a noble idea. However…………banks, loan officers, Fannie Mae, Wall Street bankers starting getting “”creative”” and unfortunately greedy by inventing low interest loans (liar loans), no down payments, no doc loans, home equity loans, lower lending standards. Basically if you had a warm pulse and a paycheck you got a loan. Who cared if you could afford the loan once the teaser rates expired….the loans were usually guaranteed by the goveernment. What happend? the real estate boom. What happend on Wall Street? The banks and Fannie Mae packaged these loans into investments such as mortgage back securities, derivities etc. Life is good, right? Well yeah, as long as the party goes on. But when the real estate market began the cool in 2007 and…………..audits (bean counters) for investors began looking at the underlying paper for the investments Wall Street and the banks sold to the US and Global investors it was clear some of the instruments in their portfolios wasn’t worth the paper they were written on. We are talking trillions of dollars by now. BOOM 2008/2009 financial collapse. Bush started and Obama approved the stimulus package. As we know now this was a joke. It was not stimulus, it was an emergency move to backstop the banking system from collapse at the time. Then the Fed went on to create QE1, QE2 and currently QE3 ti stimulate the economy via the creation (of printing money) ot the tune of nearly $3.4 TRILLION dollars. by any measure this is a lot of money and by historical standards would have more than kick started the economy to prosperity. Did you benefit from this historic amount money put into the the system? No. But the banks did. Since the Federal Reserve began tracking excessive reserves held at bank in 1959 something new has occurred. Banks have not loaned all the money they have acesss. From 1959 to 2008 bank reserves, on average, ran around $80-100 billion. It remained constant even during recessions, meaning when the Fed expanded the money supply, banks in turn loaned it out to business and people. In the fall of 2008 something historic took place. The Fed began paying banks 1/4% on those reserves and…………allowing them to borrow from the Fed at near zero rates. Banks stopped lending for many reasons, but that historical level of reserves (80-100 billion) mentioned above steadily grew to nearly $900 billion, a 900% increase in excess bank reserves. So…..where did all the money go? It certainly didn’t go into all the recovery efforts the media and the White House lead you to believe. Nope……it went to help cover a lot of bad debts and paper out there with our allies and global investors got stuck with crappy investments that the Fed and Wall Street dumped on them. Basically, mitigation funds. Remember when Congress wanted to audit the Federal Reserve on where all the money went? Boy did that story ever fade fast. In fact, over the decades Congress has wanted to audit the Fed about 28 times and failing each time. Something to keep in mind. The Federal Reserve is the biggest and most powerful central bank in the World. All though it is a quasi-government entity……..the last thing in the World to ever occurr would be an audit of the Federal Reserve. The real (accountings) will always be closed to the public.


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