The "Stimulus Did Nothing" Canard

If there is one thing Republicans agree on these days, it is that the stimulus bill "did nothing." The newest Republican phenom, Scott Brown, asked to have his swearing in hastened so that he could oppose any further economic stimulus. “The last stimulus bill did not create one new job,” Brown confidently said.

This claim is absurd on the face of it.

Oh, it is easy for people like Sean Hannity to hammer away at the fact that the Obama administration claimed that the stimulus would keep the unemployment rate from reaching 8%, and last month it was 10%. Therefore, they claim, it did nothing--unemployment is higher, so no jobs were created.

On the surface, you can see the appeal of the claim. But it won't withstand even a moment's thought. Jobs being saved, or created, is not inconsistent with the unemployment rate going up. It's the equivalent of saying that the rescue efforts in Haiti have saved no lives because the death count keeps going up.

Yes, they were wrong about what the unemployment rate would be. But if that is the standard Republicans want to use, then they have some explaining to do.

Let's take the Reagan tax cuts enacted in August 1981. At that time, the unemployment rate was 7.4%. Despite the tax cut, the unemployment rate continued to rise, reaching a height of 10.8% in December 1982. It did not decline to below the August 1981 level until the fall of 1984, over three years after the passage of the bill. Would today's GOP say that this means the Reagan tax cuts did nothing, that they "did not create one new job”?

Or look at George W. Bush. In January 2001, Dick Armey predicted that passing "a pro-growth tax cut ... could help avert a recession." Despite getting the tax cut passed in June 2001, which Bush predicted would stimulate the economy, the unemployment rate rose from 4.2% in January 2001 and peaked at 6.3% in June 2003. Yet we were told repeatedly that the tax cuts worked, even though the unemployment rate continued to rise for two years after the cuts were enacted. When even ONE Republican says that this fact means the Bush tax cuts did "nothing," I'll start taking this line of attack on Obama seriously.

The unemployment rate would be higher without the stimulus. To pretend that it did "nothing" is absurd substantively because it is demonstrably false, but if the objective is to deny Obama any credit for partisan purposes, well then there is a certain twisted logic to the claim--one perfectly consistent with the scorched earth political strategy of the GOP.

One last blatant contradiction. If the stimulus package did nothing, then it would seem tax cuts are totally ineffective and produce nothing, since about $200 billion of it was tax cuts. I won't hold my breath waiting for Republicans to admit that.