Graph of the Day for December 10, 2009

By Randall Hoven

"Then you get the argument ‘this is not a stimulus bill it is a spending bill.' Whaddya think a stimulus is?" President Obama in 2009.

The U.S. must continue to "spend our way out of this recession." President Obama, as quoted by the Associated Press, this week.

"We find that the Federal Reserve typically responds to downturns with prompt and large reductions in interest rates. Discretionary fiscal policy [e.g., spending], in contrast, rarely reacts before the trough in economic activity, and even then the responses are usually small." From a 1994 NBER working paper titled What Ends Recessions? by Christina Romer (currently Obama's Chair of the Council of Economic Advisor) and David Romer (her husband, and member of the recession dating committee of the NBER).

Christina Romer's Estimated Effects of Fiscal and Monetary Policies On Ending the Great Depression