Emperor Still Garment-Free

(Re-Recycling an old post with new data.)

Back in January, shortly before the inauguration, the incoming Obama economic team issued a (PDF) report "The Job Impact of the American Recovery and Reinvestment Plan" advocating passage of the legislation before Congress. Central to the argument was Figure 1, showing their prediction of the unemployment rate with and without the plan (click for original size):

[Projections]

There were plenty of reasons to be skeptical then (see Greg Mankiw in the January 10 NYT, David Harsanyi in the January 30 Denver Post, or this handy collection of links from the Cato Institute.)

But "they won", the American Recovery and Reinvestment Plan was passed and signed, and … now, about five nine ten months later, some bright person ("Geoff" at Innocent Bystanders) has overlaid the actual unemployment data points on the original graph. The result (click for big version):

[vs. Actual]

Your associated URL this month is a pointer to today's WSJ editorial on stimulus spending:

A familiar definition of insanity is to keep doing the same thing and expecting different results. So in the wake of yesterday's report that the national jobless rate climbed to 10.2% in October, we suppose we can expect the political class to demand another "stimulus." Maybe if Congress spends another $787 billion in the name of job creation, it can get the jobless rate up to 12% or 13%.
Heck, if Obamacare passes, I'm sure they can make it go much higher than that.

Last Modified 2012-10-05 9:01 AM EST