Is This Why the Stimulus Didn't 'Work'?

More

If you're in the business of making pronouncements about economics and politics, it's always safe to say that the stimulus has failed. The average American seems to agree. A July CBS poll showed that three out of four respondents believe the Recovery Act and the mini-stimuli in its wake either damaged the economy or had no effect.

If it failed, why did it fail? Were the tax cuts poorly designed? Did it spend too quickly to bail out the states, or spend to leisurely to build roads and rail? One fairly well-established explanation for the stimulus' failure to stimulate is that the government gave money to states and people who didn't spend it on new things, like goods and jobs. Instead we spent it on old things, like employees' salaries and debt payments.

According to the latest Allstate-National Journal Heartland poll, consumer spending is the second most important indicator of an economic recovery. At the same time, we think spending more money is the least important we can do as individuals to help the economic recovery. As consumers, we're not spending money. As recovery watchdogs, we're waiting for other people to start spending money. We're pocketing the stimulus even as we expect others to spend it.

The charts:

What People Can Do.pngIndicators.png

Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

The Death of Film: After Hollywood Goes Digital, What Happens to Movies?

You'll never hear the whirring sound of a projector again.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In