House Speaker Nancy Pelosi (D-Calif.) said at a small gathering in San Francisco Friday that the stimulus has worked in staving off deep economic depression, but that it's hard to campaign convincingly on scenarios you have prevented. Now she's working to remind voters of what might have been.
"Economists from right to left have said if we had not passed the recovery package and other accompanying initiatives taken by the federal government, we would have 8.5 million more people unemployed and the unemployment rate would be 14.5 percent," Pelosi told her hometown audience.
In a paper discussing their findings, Zandi and Blinder wrote that "without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration's fiscal stimulus program, the nation's gross domestic product would be about 6.5 percent lower this year. In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation..."
Cue a Monday article in USA Today reporting that top economists agree that "the stimulus worked in staving off a rerun of the 1930s." Pelosi's press office immediately sent out a "Fact Sheet" touting the journalistic findings.
"It's no surprise that the administration would proclaim its own policies a success," read an excerpt from the article cited by Pelosi's office. "But its verdict is backed by economists at Goldman Sachs, IHS Global Insight, JPMorgan Chase and Macroeconomic Advisers, who say the stimulus boosted gross domestic product by 2.1 percent to 2.7 percent."
Pelosi's ramped up efforts to show how bad the economy might have been without the stimulus come after a Friday speech by Federal Reserve Chairman Ben Bernanke in which he said Americans would like the Obama administration to take more responsibility for the dire state of the economy.
Pelosi, for her part, thinks Americans would do well to remember that President Obama is engaged in the business of fixing a mess that he inherited, not one of his own making.
"The president has asked for this responsibility, he is facing this responsibility, and so is the Congress of the United States," Pelosi said. "But that doesn't mean we can't remind people of how we got here in the first place. And that's important for this reason: because the Republicans have said that their agenda going forward, should they win the Congress, is the exact agenda of the Bush administration. An agenda that took us to the crisis of our financial institutions going over the brink, deep recession, and soaring deficits."
But even as Pelosi reminded Americans of "how we got here in the first place," she admitted it may not be the most politically savvy strategy. "You don't get any credit in campaigns for what you prevented from happening," she said. "But, it's important to know that if [Americans] want to go back to the exact agenda of the Bush Administration that choice must be made clear to the American people, and we intend to do that."
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