At the third presidential debate on Wednesday, moderator Chris Wallace constructed an economic policy question around a total falsehood.
Wallace, asking about slow economic growth since a global financial crisis triggered the worst recession since the Great Depression, said Democratic nominee Hillary Clinton’s economic plan “is similar to the Obama stimulus plan in 2009, which has led to the slowest GDP growth since 1949.”
That’s right: The stimulus package caused the economy to slow, Wallace seemed to suggest. This is pure nonsense. The stimulus package was gauze on the wounded American economy. It didn’t cause the bleeding.
Not a single study has ever backed up Wallace’s assertion that $832 billion pumped into the economy by the American Recovery and Reinvestment Act dragged growth down. Six studies found it helped increase growth and employment. Three studies found it had a negligible effect. If any set of policies has dragged down economic growth, it was post-recession austerity, not the stimulus.
There are many reasons to be frustrated with the slow growth in wages, wealth and the economy as a whole since the Great Recession. But these real problems are partially the result of how nasty it can be for an economy to recover from a financial crisis-induced meltdown. And the fact that the stimulus package was too small.
The size of the stimulus bill wasn’t based on how much money the American economy needed, but on what then-White House chief of staff Rahm Emanuel guessed he could squeeze through Congress. We now know the amount of the package wasn’t enough to fully stimulate the damaged American economy.
Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.