When will Americans be able to look out and recognize measurable, wonderful gains from the stimulus?
Well, we’re already able. For example, 95 percent of us received Making Work Pay tax cuts of up to $800 a year for a family. But they were dribbled out through reduced withholding, because behavioral economics suggests that we’re less likely to spend money when it arrives in a big chunk, so fewer than 10 percent of us noticed them. The backstory of that decision will make Obama supporters cringe.
Similarly, anyone who received expanded unemployment benefits or food stamps or Cobra subsidies or Pell Grants in 2009 or 2010 benefited from the stimulus. The stimulus saved more than 300,000 education jobs, and preserved over $100 billion worth of health services for the poor. We’re already using more clean energy and less energy overall because of the stimulus; the electric vehicle industry is here because of the stimulus; the domestically manufactured content of U.S. wind turbines has increased from 20 percent to 60 percent because of the stimulus. There are over 100,000 stimulus projects that have upgraded our parks, subways, hospitals, food pantries, and so forth. On our last vacation my family visited Ketchikan, Alaska, where the stimulus upgraded the nature center. It was a very nice nature center.
Also: The stimulus helped prevent a depression, and as Romer says in the book, depressions really, really suck. They create horrible human suffering, and horrible deficits, too. The economy is quite lousy, but it really could’ve been a lot lousier.
The stimulus will produce more good stuff in the future. By 2015, almost all of us will have an electronic medical record because of the stimulus. The stimulus is also pouring $1 billion into desperately needed “comparative effectiveness research” that will help doctors and patients learn what kind of treatments actually work. There’s billions more for data-driven education reforms—Investments in Innovation and School Improvement Grants as well as Race to the Top—that will seek to scale up promising approaches in public schools. And the most exciting changes will transform the way we generate and consume energy. For example, a company called Envia Systems that got a grant from ARPA-E—a modern version of the Manhattan Project—has already developed the world’s most powerful lithium-ion battery, which could slice $5,000 off the price of the next Chevy Volt.
Will Americans associate any of this change with the 2009 stimulus? I doubt it. Maybe they will if my book becomes a runaway best-seller.