Big Surprise: The Stimulus Isn't Working

Right now the unemployment rate is 9.5 percent. The administration had said that, thanks to their fiscal stimulus, it would be less than 8 percent.

I don't blame them for missing a forecast. Forecasting is difficult. And this labor market has been surprisingly bad.

I do blame them for misleading the public by saying that the stimulus package would improve the unemployment rate (relative to whatever admittedly unpredictable outcome it would have been without stimulus). They claimed that, by June, the unemployment rate would be improved by almost 0.5 percentage points. That clearly has not happened.

Although we did not know the future of the economy, we knew the stimulus package wouldn't help.