The Report on Stimulus CBO Wishes Would Go Away

J.D. Foster / August 26, 2010

Pity the poor Congressional Budget Office (CBO) Director. Congress passes and the President signs the most massive fiscal stimulus program in history, spending more money on Keynesian stimulus than has been spent so far on the Iraq war. But, unlike the Iraq war, the stimulus has been a complete bust.

Rather than launch a recovery, the stimulus managed only to launch a jump in the national debt. The economy enjoyed a mild bump late in 2009 as businesses rebuilt their inventories—a development completely unrelated to the stimulus—and then slid back to anemic growth in the second quarter and now appears to have stalled out entirely.

As part of the stimulus legislation, Congress mandated CBO report regularly on how well the stimulus is doing. Money spent, economy faltering, Congress wants happy news about their stimulus, and in response all CBO can do is continue to run their antiquated models telling us that down is up and slow is fast. (more…)