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Monday, June 15, 2009

Damage Control

Yesterday, Vice-President Biden was on NBC’s Meet the Press to discuss, among other topics, the impact of President Obama’s stimulus package. The Vice-President spent a significant portion of the interview defending the Administration’s stimulus-related employment assertions versus reality – as shown in this well-circulated graph:

(The blue lines represent the Administration’s unemployment predictions with (dark blue) and without (light blue) the stimulus package, compared to the maroon dots that represent the actual numbers.)

Host David Gregory pushed the Vice-President to explain the assertion that the package, “could keep unemployment at 8 percent and then it would go down after that.” Gregory continued, “In fact, it's now at 9.4 percent. Was it oversold?”

Biden responded, “No. What we did is we took the econometric models that were used by businesses as well as academics. At the time no one realized how bad the economy was. The projections, in fact, turned out to be worse. But it was--we, we, we took the mainstream model as to what we thought and everyone else thought the unemployment rate would be.”

The exchanged continued:
MR. GREGORY: Right. But the, but this package was sold on the premise that it would in fact keep unemployment at 8 percent. It's exceeded that...

VICE PRES. BIDEN: It wasn't sold on that. It was sold on it would create...

MR. GREGORY: That's what the [Council of Economic Advisors'] report said, Mr. Vice President.

VICE PRES. BIDEN: No, it said it would--what would happen was it would save or create jobs. It's doing that. It is doing that. Everyone guessed wrong, at the time the estimate was made, about what the state of the economy was at the moment this was passed. Now, we're going to recalibrate this in terms of what we've inherited, what in fact is going on out there. But look, the bottom line is that jobs are being created that would not have been there before.
Of course, everyone didn’t guess wrong. In fact, all but three Republicans in both the House and the Senate argued this plan wouldn’t work and proceeded to vote against it.

Moreover the Congressional Budget Office told the lawmakers and President Obama on at least two occasions that this package would be bad for the economy in the long run.

It is clear that the Administration understands that this is their policy and their problem. The stimulus was created, marketed, and bought by President Obama and Congressional Democrats on behalf of the nation’s taxpayers.

Now that the results are not materializing as promised, and those same taxpayers are starting to question this “investment,” the Administration has shifted gears to damage control.

Here is a video of the stimulus segment. Visit Meet the Press for more.

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