Did the Stimulus Help or Hurt the Economy?

The debate among economists and politicians over President Obama’s massive stimulus package passed a year and a half ago—did it boost or cripple the economy?—is having a real impact in Congress. The pro-stimulus side argues the recession would have been far worse without the massive payout. The anti-stimulus crowd says only by cutting the deficit now will we be able to avoid high interest rates and more economic woes in the future. The dispute is having a real impact on Congress, but the sides don’t always line up in a predictable way. Lawmakers battled for weeks over whether to extend unemployment benefits, (Republicans opposed the measure, citing the need to cut the deficit, and lost.) Now the White House wants to allow Bush tax cuts on families making more than $250,000 a year to expire, making a dent in the deficit. (Republicans oppose this plan, too, saying it will hurt the economy.) Whether the stimulus actually helped the economy is impossible to know for sure, as economists can’t observe some kind of alternate-universe America in which the measure never passed. Congress will have to act long before the debate is settled.