Someone tell Republicans to pull their fingers out of their ears: Alan Blinder, a Princeton professor and a former Federal Reserve official, and Mark Zandi, the chief economist at Moody’s Analytics, argue in a new paper based on an economic model that, without the Wall Street bailout and the economic-stimulus package, the national GDP would be 6.5 percent lower this year. Additionally, 8.5 million more people would be unemployed and the dollar would be experiencing deflation. “While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective,” the duo writes after concluding their model proves the argument. They also argue that the financial bailout had more of an effect on the economy than the stimulus did.
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