Austin Goolsbee takes to the White House White Board to explain job losses and gains every month for the past three years. Note the small drop off over this past summer, when the stimulus began to fade somewhat. It’s my own belief that if the stimulus had been stronger growth would be stronger now, but it’s just as clear that the stimulus did good for the economy, and provided many jobs, if not as many as we need.
Also note in his explanation: the stimulus contained a lot of tax cuts. Taxes are lower now than when President Obama took office. Lots of people still don’t understand that.
Nonetheless, we cannot cut our way to prosperity. We have to grow out of it. Tax cuts alone can’t do that, and cuts in spending are actually counter-productive in many cases.
When was the last time Britain’s public spending was slashed by more than 20 percent? Not in my mother’s lifetime. Not even in my grandmother’s lifetime. No: It was in 1918, when a conservative-liberal coalition said the best response to a global economic crisis was to rapidly pay off this country’s debts. The result? Unemployment soared from six percent to 19 percent, and the country’s economy collapsed so severely that they lost all ability to pay their bills, and the debt actually rose from 114 percent to 180 percent. “History doesn’t repeat itself,” Mark Twain said, “but it does rhyme.”