Louis Woodhill: Maybe Stimulus Made Recession Worse

If you go by the evidence rather than the CBO’s “faith based” methodology, it is hard to avoid the conclusion that the $814 billion “stimulus” program has, in fact, deepened and prolonged the recession. Prosperity is possible, but “stimulus” is not the answer.


The Congressional Budget Office uses “multipliers” in its models when estimating the figures for Gross Domestic Product. So a dollar spent by the government is multiplied by this number and, poof, output is increased by some amount. A multiplier of less than one results in less efficiency because $1 dollar was used by government to produce less than $1 dollar of GDP.


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