James Pethokoukis has an updated version of the "infamous Bernstein-Romer chart", which was released by the Obama administration to promote its stimulus package (ARRA – American Recovery and Reinvestment Act), purporting to project unemployment rates with and without the stimulus:


Estimates of the impact of ARRA at the time of passage vs reality

Sadly, as the chart shows, unemployment is now a lot worse than even the Administration’s worst-case scenario. The US stimulus, on the Obama administration’s own terms, has failed. Still, at least they had the honesty to set out this kind of chart – to listen to our rulers (of whatever party), you’d think we were living in the best of all possible worlds all the time – it’s more Candide than candid. People like Paul Krugman and other fans of stimulus have said that the above graph simply shows that a bigger stimulus was needed, but this sounds ridiculous to most people. The chart is a great illustration of the folly of fiscal stimulus.

Maybe a good rule – suggested recently by Scott Sumner – would be to require policiticians to set out their benchmarks at the start of their term, and pay them according to how closely they meet these targets. This might have the added bonus of making them more inclined to implement good policies (rather than politically popular ones). I wouldn’t hold my breath on that one, but it would still be nice for a British politician’s failure to be as baldly obvious as the one shown above is.