CBO: Stimulus Package Adds Up to Artificial GDP Improvement
The Congressional Budget Office says that in the second quarter the effects of $787 billion package added 1.7% to 4.5% in GDP, cut the unemployment rate by .7 to 1.8 percentage points, and increased the number of people employed by…
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If the data is true, it is an indication of how much GDP could have been down in the second quarter. There are already concerns that the 2.4% initial reading could be revised as low a 1% because of the traded deficit. Without the stimulus package, the drop in GDP could have easily been 2%.
The question that the report raises is what will happen when the federal aid runs out. A number of economists have insisted that a second stimulus package is necessary to keep GDP from becoming negative again. The economy is already moving in that direction with harsh data from the housing market and rising weekly jobless claims. The political drive for austerity may well do more harm than can be imagined.
Douglas A. McIntyre
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
