Hey David Gregory, This is Why the Stimulus Is Not Working
Via Noam Scheiber, I see that Larry Summers had some difficulty explaining the stimulus on Meet the Press this Sunday. The exchange went like this: David Gregory would say "Where are the jobs you promised?" and Summers would respond "Not here yet, because we inherited a recession worse than expected." Then Gregory would respond, "But where are the jobs you promised?" and Summers would repeat himself, slowly.
I'm sure it was frustrating for Dr. Summers -- who wasn't exactly forthright about stimulus numbers himself (more on that later) -- but it would have been easier for him to make his point if he came to MTP with graphs. Like this one:
The best explanation I've found for why the stimulus didn't work is this graph from the GAO analysis of the stimulus act. It shows pretty clearly that the 76 percent of stimulus spending through the first four months went to fill in the gaping holes in Medicaid and state budgets. In other words, the stimulus isn't acting like a pole vault lifting job creation above the baseline. It's been acting like a crutch to keep state budgets and payrolls from imploding tumbling.