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Did Stimulus Package Stimulate Economy?

Burlington, Vermont - October 5, 2009

The effectiveness of the $787 billion dollar stimulus bill was on display at the University of Vermont this afternoon.

Did the record setting package help, hurt, or do nothing for the economy?

Two of the nation's most distinguished economic scholars debated that question at UVM this afternoon. Jeff Miron is a senior lecturer at Harvard. He says there's no way to know if the money has helped because a lot of it has not yet been spent, so any improvement in the economy is more likely due to monetary policy. He also notes that the affect of no stimulus package will always be an unknown.

"We do know there's been lots of recessions and lots of countries where there was no stimulus, and yet those recessions went away and on average they went away as quickly as recessions have gone away when we have had a stimulus, so that's not very supportive of the pro stimulus view," said Harvard University Professor Jeffrey Miron.

"We're not transferring from Peter to Paul, we're transferring from good times to bad times. What we spend today we will have to ultimately tax, but I think that we want to make sure we spend when the economy is in a hole and there are extra jobs to create, and let's do more spending now and less in the future when the government would otherwise be competing with the private sector for workers," said University of Pennsylvania professor Justin Wolfers.

Today's debate was part of the UVM's annual Janus Forum.