Thursday, November 17, 2011


The Congressional Budget Office is the official scorekeeper for fiscal policy at the Federal level.  During testimony this week, CBO Director Douglas Elmendorf said that the President's much-vaunted (by himself, at least) stimulus from 2009 will be a drag on the economy in the long run.  As Peter Suderman puts it,
even the mildly Keynesian congressional scorekeeper agrees that borrowing $800 billion dollars ultimately creates a drag on the economy and a net loss in economic performance relative to what otherwise might have been. And yet the administration went ahead with the legislation anyway, arguing that it would be more or less a free lunch in the long run.