Did “Most” Economists Support the Stimulus?

During the run up to the February 2009 vote for the Stimulus Program, formally known as the American Recovery and Reinvestment Act, the press was awash with repeated claims from the White House that “most economists” supported the federal spending program. “Most” is a tricky word, but the idea was to convey the idea that a near consensus or general agreement that federal intervention, specifically spending, was necessary. It helps that professional surveys of economists are rarely conducted on timely policy issues, but new evidence suggests that general agreement simply did not exist at the time.

The press, for its part, tended to depict proponents of federal spending as pragmatists while opponents were blinded by political ideology. For example, McClatchy newspapers filed a story in January 2009 noting the following:

Some economists are ideologically opposed to any such massive government plan. The Cato Institute, a libertarian research center, has organized a list of dozens of academic economists who oppose the plan, urging instead tax cuts and smaller government, in favor of free markets and lower taxes over big government activities. Cato will advertise its list in coming days. However, that isn’t where the balance of expert opinion comes down today.

The reporter prefaces this paragraph with the following: “However, most leading economists who are experienced in public policy generally favor the stimulus plan that the House is considering because through it the government will step up spending at a time when private-sector spending has fallen off sharply.” Even in 2010, as the debate over the stimulus program’s impact was widely debated, the White House claimed that most economists support the program and the Obama Administration’s estimate that it created millions of jobs. (See my critique of this argument here.)
So, I found the following statistics on economists signing petitions in a recent issue (September 2010) of Econ Journal Watch by David Hendengren, Daniel Klein, and Carrie Miltion of particular interest. While the authors survey dozens of petitions, statements and resolutions signed by economists over the years, one pair of petitions asking for professional support for a federal stimulus program is particularly noteworthy. The first published in November 2008 by the Center for Economic and Policy Research signed up 387 professional economists from 157 universities to support federal spending to boost the economy. Another petition circulated by the Cato Institute in January 2009 signed up 203 professional economists from 128 universities opposing the federal stimulus act. Of course, these petitions represent economists willing to go public with their views. We still don’t know the views of professional economists overall (or those that study and research economic policy).
Nevertheless, I think its safe to say that general agreement or consensus on the best policy response for the federal government simply didn’t exist at the time. I doubt there is much general agreement now because the data are so murky. It will take years to sort out the actual effects of the program.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.