When you recognize that GDP growth in the second quarter of 2010 was only 2.4%, and could revise to just 1% after all the data comes in, this estimate from CBO is horrifying:That was dday who goes on to point out that although it's great that the administration was able to prevent the worst case scenario from coming true, it's also sadly true that this information makes it more clear than ever that the stimulus was inadequate to do the job it needed to do. And it's also true that the inept use of the bully pulpit, particularly on deficit fever (which even DFH's knew from the beginning was playing into the hands of the wealthy wingnut elite) and the silly rhetoric of "Recovery Summer" has effectively bound the hands of the government going forward.
The massive stimulus package boosted real GDP by up to 4.5 percent in the second quarter of 2010 and put up to 3.3 million people to work, the nonpartisan Congressional Budget Office said on Tuesday.
CBO’s latest estimate indicates that the stimulus effort, which remains a political hot potato ahead of the November congressional elections, may have prevented the sluggish U.S. economy from contracting between April and June.
Economists surveyed by Reuters expect that revised numbers due out on Friday will show that the economy grew at an anemic 1.4 percent pace during that time period — less than the boost of at least 1.7 percent that the stimulus provided, according the CBO estimate.
So not only would the economy have contracted at extreme rates throughout late 2008 and 2009, but without the stimulus the economy would STILL be contracting. That’s a testament to how completely shaky the recovery is right now. And the scariest part is this final line: “CBO said it expects the effects of the stimulus to gradually diminish over the remainder of the year.”