White House economic adviser Christina Romer, in her final speech in her current post, on Wednesday defended the success of last year’s $787 billion stimulus and called for more federal spending to speed up economy recovery.
Romer, who on Friday leaves her job as chairwoman of the White House Council of Economic Advisors to return to her previous job as an economics professor at the University of California at Berkeley, said she is proud of the recovery actions taken by the administration and thinks they “made the difference between a second Great Depression and a slow but genuine recovery.”
The success of the stimulus was due to its being “large, well-diversified, temporary and fast-acting,” Romer said during remarks at the National Press Club. Looking ahead, she said: “The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. In my view, we should be moving forward on both fronts.”
Romer said critics of the stimulus package often “falsely claim” that spikes in unemployment are evidence that it did not work. The reality, she said, is that economists were off in their baseline assumptions before the American Recovery and Reinvestment Act even got off the ground, which is “clear-cut evidence” that the problem was not in the effects of the legislation.
“It is clear that the Recovery Act has played a large role in the turnaround in [gross domestic product] and employment,” Romer said. She cited data from the nonpartisan Congressional Budget Office and other outlets indicating that the stimulus “has already raised employment by approximately two to three million jobs relative to what it otherwise would have been.”
The departing adviser said she regrets leaving the administration at a time when there is “still so much unfinished business. I would give anything if unemployment really were down to 8 percent or lower.” But ultimately, she said, it is going to come down to lawmakers putting partisanship aside and passing key job-creation measures to “finish the job of economic recovery.”