Sunday, February 15, 2009

Axelrod: Don't Expect Miracles From Stimulus

So we rushed this thing through Congress under cover of darkness and now we're not sure if it's even going to work.

Look on the bright side, at least Nancy Pelosi's Salt Marsh Harvest Mouse will be saved.

Reuters reported:

WASHINGTON (Reuters)- President Barack Obama's aides warned Americans on Sunday not to expect instant miracles from the $787 billion economic stimulus bill he will sign this week, but said it would help eventually.

Obama is due to sign the bill passed last week by Congress in Denver on Tuesday. It was the first major legislative victory of his young presidency, which could rise or fall with its success or failure.

"There will be signs of activity very quickly," David Axelrod, the White House senior adviser, said on "Fox News Sunday." "But it's going to take time for that to show up in the statistics. The president has said it's likely to get worse before it gets better."

Fox News reports:
The White House is standing by its estimate that the package will save or create 3.5 million jobs.

But most Republicans don't see it happening that way, and neither do some economists. Mark Zandi of Moody's puts the jobs number at 2 million to 2.5 million. He said he expects unemployment to go up by the end of next year to 9 percent and could peak at 10 percent. Zandi said he wanted an even larger stimulus.

Zandi told "FOX News Sunday" that he faults the White House with three errors in their planning, including the rate at which infrastructure spending will be distributed. He said that putting a fix on the Alternative Minimum Tax -- $70 billion of the $787 billion package -- is not stimulatory and people won't "behave as if that tax cut is permanent," which it is not.

"That translates into a lower unemployment rate of about a point to a point and a half," he said.

But Axelrod responded that that is one man's view.

Really, David? I'm pretty certain the folks over at Moody's have a more firm grasp of economice reality than anyone on Capitol Hill.

(Hat Tip: Gateway)

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