For screwed up it is:
Why the Stimulus FailedEveryone expects the president tonight to ask Congress for more of the same - only ... better - in order to turn the economy around. More of the same? Different results? Hello?
Wall Street Journal
Even zero jobs growth in August doesn't seem to have disrupted President Obama's faith in the economic policies of his first three years, so one theme we'll be listening for in tonight's speech is how he explains the current moment. Why did his first jobs plan—the $825 billion stimulus—so quickly result in the need for another jobs plan?
The Keynesian theory was that a burst of new government spending would take up some of the slack in aggregate consumer demand. This was justified in 2008, again in 2009, and is still defended now based not on real-world observation but on abstract macroeconomic models that depend on the assumptions of the authors.
The problem is that all but the most reductionist Keynesians of the Paul Krugman school believe it matters what the government spends money on. A dollar that eventually will be taken out of the private economy through borrowing or higher taxes to fund pointlessly expensive projects ... is not the way to nurture a recovery.
The economy would have benefitted far more if the government had instead improved the incentives for people and businesses to invest, produce and grow. The President probably won't mention any of this, but it does explain why he has to give his latest speech. [link]
As Michael J. Boskin reveals in the chart below (source), we need seriously different results from those obtained thus far.
And more of the same isn't going to get them.
Click on the chart to enlarge it.