Stimulus Worked in 2009. Next Time It’ll Have to Work Better.
Government spending and tax cuts kept the financial crisis from getting worse. They also taught fiscal-policy lessons the U.S. might need soon.
Recovering.
Photographer: Jay LaPrete/BloombergIt’s been a decade since Congress approved a huge emergency package of spending projects, payments to individuals and tax cuts to stimulate a U.S. economy staggered by the 2008 recession. We know now that it worked, limiting the damage caused by the downturn and vindicating the idea that government spending during periods of economic weakness saves jobs and speeds recovery. We also know that it could have worked better.
As an admittedly biased participant — I was the U.S. budget director when President Barack Obama signed the stimulus legislation on Feb. 17, 2009 — I offer eight lessons based on recent history and amid fears that the next recession might not be far away: