I’m sure it’s partly me, though Paul K has the same problem, and he’s awfully clear. But it is very hard these days to get people to accept the logic and the results of Keynesian stimulus.
Not everyone, but many just can’t believe the government spending could possibly do anything useful on the jobs front, or on any other front, for that matter. If you show them very simple slides like these, showing the sequencing–things were really bad, the Recovery Act (and monetary stimulus) came on, things get less bad, then stimulus faded and things started to get bad again (GDP and job growth slowed)—they are not convinced. They have a different sequencing in mind: things were bad, stimulus passed, things are not all better. Ergo, it was a flop.
Sources: BEA, BLS (h/t: HS)
If you show them nonpartisan CBO analysis showing that the unemployment rate would have been higher without the stimulus, they’re more favorable to their own sequencing then any egghead’s counterfactuals.
Maybe I’m just talking to the wrong people, or maybe I’ve not yet found the right words, the right narrative, the right slides. Or maybe, since Reagan, the gravitational pull of the “government is the problem” mantra has strengthened to an irresistible point for many of us.
That’s bad, because government is neither the problem nor the solution. It’s a critical component of a functional society, and when the market fails, it must step up. To ignore that is to lose the ability to self-correct, and systems that cannot self-correct are systems that cannot survive.