Will The Stimulus Work?

That's what a lot of people are asking right now. Business Week had a one of the more balanced takes on the issue.

Yet while job creation is arguably the most important goal of the stimulus package, other parts of the bill will have a much more immediate and visible impact. Food stamp increases and extensions of unemployment benefits will be among the first noticeable effects of the package. Tax credit payments for individuals and families would follow, along with other tax breaks and incentives. Rising consumer confidence and lower unemployment will be far more gradual, and aren't likely to surface until late 2009 at the earliest.

I agree that the increased unemployment benefits will help people pay their bills and hopefully keep their homes. That was one of the things that I fully agreed with. The food stamps - I see, but I'm not sold that it is the right way to help the new jobless.

There's an understanding among many economists that the sooner a government intervenes in an economic crisis, the more effective it tends to be in getting the economy back on track. That doesn't mean that precise measurement of success is easy, however. "The problem is, we don't know what trajectory the economy would take without the stimulus package," says J. Bradford DeLong, an economics professor at the University of California-Berkeley. "We can't enter a Star Trek-like divided universe in which we compare what's happening with the stimulus versus without it. It's hard to precisely judge its impact."

Especially with this particular stimulus package. Many have argued that the projects funded in this stimulus were not "shovel ready" projects - which are the ones that will help the economy fastest. Much of the Republican Congressional criticism of the stimulus package has been that spending in 2011 or 2012 will not help the economy today and they are right. Many (myself included) have long argued that spending on groups like ACORN do not create jobs but tax cuts to job providers do! There are many flaws to this bill that are going to be "wild cards" in the success of the stimulus package.

However, President Obama holds the keys to the biggest wild card of all. White House Chief of staff Rahm Emmanuel has been quoted as saying "You don’t ever want to let a crisis go to waste: it’s an opportunity to do important things that you would otherwise avoid.”. President Obama has gone out of his way to sell the crisis. However, this morning former President Bill Clinton offered President Obama better advice today when he said that the President needed to "sell the recovery"and former President Clinton IS RIGHT! President Obama is an excellent sales person. He needs to get out in front of the media now and start building up consumer confidence again. Instead of going from crisis to crisis saying "Oh we need to fix this crisis", President Obama can do more to help the economy by saying "yeah things are bad, but there is no need to panic. If we all chip in and work hard and continue to live our lives we will get through this as we have gotten through other crises. "

The media has (in some small part) helped the crisis get to the point it is at today. They media can help make it better or make it worse. If the President really wants to make it better he needs to start selling the fledgling recovery. It's the smart thing to do.