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11 Jul 2009 03:07 pm
Has The Stimulus Failed?
Daniel Gross says it's too early to tell:
Perhaps the biggest mistake stimulus proponents made was to suggest
that this recession would (and could) end quickly. Modern America is
not equipped—financially, socially, or psychologically—to deal with
long recessions. We don't have the safety net or the savings to cope
with a protracted downturn. And fortunately, we haven't had to. The
last two recessions, which ended in 2001 and 1992, respectively,
lasted only eight months each.
But recessions brought on by financial crises are always deeper and
more long-lasting than other recessions, as economists Ken Rogoff and
Carmen Reinhardt
show in this paper.
By February 2009, when the stimulus package was passed, the recession
was already the longest in 28 years; now it's the longest contraction
since the Great Depression.
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