CNN's Carol Costello repeated without challenge a claim she called "effective Republican spin" -- that spending in the pending Democratic economic recovery bills is not stimulus. She did not point out what numerous economists have noted: that, as the Center for Economic and Policy Research's Dean Baker said, "[s]pending is stimulus. Any spending will generate jobs. It is that simple."
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Asserting that Obama's "stimulus plan has lost its luster," CNN contributor Carol Costello repeated without challenge a claim she called "effective Republican spin" -- that spending in the pending Democratic economic recovery bills is not stimulus. She did not point out in rebutting the "effective Republican spin" what numerous economists have noted: that, as Dean Baker, co-director of the Center for Economic and Policy Research, said, "[s]pending is stimulus. Any spending will generate jobs. It is that simple."
During the February 4 edition of CNN's American Morning, Costello reported that Republicans, including Sen. John McCain (AZ), oppose the economic recovery legislation because "they say [it] is not a stimulus plan, but a spending plan." She added that this claim is "effective Republican spin since many Americans believe liberal Democrats are guilty of padding [President] Obama's stimulus plan with pork."
In repeating the claim that the recovery bill is "not a stimulus plan, but a spending plan," Costello did not acknowledge that CBO estimates that either the House version or the proposed Senate version of the bill would "have a noticeable impact on economic growth and employment in the next few years." Additionally, as Media Matters for America documented, in his January 27 testimony before the House Budget Committee, Elmendorf said that H.R. 1 would "provide massive fiscal stimulus that includes a combination of government spending increases and revenue reductions." Elmendorf further stated: "In CBO's judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation."
Elmendorf also explicitly refuted the suggestion, furthered by Costello, that some of the spending provisions in the bill would not have a stimulative effect, stating: "[I]n our estimation -- and I think the estimation of most economists -- all of the increase in government spending and all of the reduction in tax revenue provides some stimulative effect. People are put to work, receive income, spend that on something else. That puts somebody else to work."
Similarly, discussing an NPR story that repeated Republican senators' claims that spending in the bill is not stimulus, Baker wrote in a February 3 post to his American Prospect blog:
Spending that is not stimulus is like cash that is not money. Spending is stimulus, spending is stimulus. Any spending will generate jobs. It is that simple. There is a question of whether the spending will go to areas that will provide benefits, long-term or short-term, to the economy, but there is no question that money that is spent will create jobs and therefore is stimulus.
Any reporter who does not understand this fact has no business reporting on the economy.
Moreover, in a December 1, 2008, discussion on National Journal's Economy blog, Martin Regalia, U.S. Chamber of Commerce chief economist, wrote: "In these unusual times, a significant stimulus package is necessary to get the economy moving quickly and, as such, will swell the deficit in the short run. I am not overly concerned about negative effects stemming from a temporary increase in the deficit, especially in such an unusual time period." Similarly, University of Texas economics professor James K. Galbraith wrote: "Right now and for the immediate future, the budget deficit is the only source of demand that can fuel a recovery." And Brookings Institution senior fellow Gary Burtless stated: "When there are abundant unemployed resources and the government faces very low borrowing costs, it makes sense for the government to increase its borrowing in order to put some of the idle resources to productive use."
From the February 4 edition of CNN's American Morning:
[begin video clip]
COSTELLO: But some, like The Wall Street Journal's Peggy Noonan, are now saying Obama-mania is reaching the saturation point, and is in danger of demystifying and robbing the presidency of its power. While some say she's overreaching, they can see her point.
AVLON: There is a danger for presidents speaking too much and too off-the-cuff. It can diminish the authority from which they speak.
COSTELLO: Perhaps Us Magazine is an early sign. Its cover shows Michelle Obama and the kids. Where's the president? Look closely and you can see his arm, but the rest of him has been cropped out in favor of an allegedly chubby Jessica Simpson and her dreadful mom jeans. That slight aside, others say the president's star still shines brightly, a good thing, since his stimulus plan has lost its luster.
MARK McKINNON (media consultant): This could be the most important bill of his presidency. So he's got to use the capital that he's got. He's a very effective communicator, and I think it's actually a smart strategy to get out and hit all the media really hard right now.
COSTELLO: Especially when many Republicans, like John McCain, are saying they will vote --
COSTELLO: -- on what they say is not a stimulus plan, but a spending plan: effective Republican spin since many Americans believe liberal Democrats are guilty of padding Obama's stimulus plan with pork. And until President Obama can persuade them otherwise, expect him to continue to hog the spotlight.
[end video clip]
COSTELLO: And you know, John Avlon, one of the analysts I spoke with, says the president must convince Americans, especially centrists, that his plan really is a stimulus plan that will get the economy rolling and not a spending plan that will sink the country deeper into debt. If he doesn't, Avlon says, Obama will reach a saturation point in about six months. If he can't show Americans he can actually fix something, Americans will turn away no matter how many interviews the president does -- John.
JOHN ROBERTS (co-anchor): That's the problem with the presidency: The honeymoon doesn't last very long.