Friday, November 18, 2011


Congressional Budget Office director Douglas Elmendorf testifying before the Senate Budget Committee. He is responding to questions from Sen. Jeff Sessions (R., Ala.) the senior Republican on the committee.

ELMENDORF: What we said was, [the stimulus bill] would be a big boost in the level of GDP in the first 3 or 4 years,*** and then, relative to what would have happened to GDP without that law… the level of GDP would be a little lower at the end. That is, a net negative effect on the growth of GDP over 10 years.

SESSIONS: And in the next 10 years, since you’re carrying that debt and paying interest on it and the stimulus value is long since gone, it would be a continual negative of some effect?

ELMENDORF: Yes, it would represent a drag on the level of GDP beyond that, if no other actions were taken.

Of course, future estimates can be mistaken for many unpredictable factors, the chance of this being optimistic are probably equal to the chance they are pessimistic. But even the best case is not likely to be good.

HT:   National Review Online

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