Here’s the punch line. According to the White House’s own calculations, the economy would have been better off today if the government had done nothing instead of spending and borrowing $6 trillion.
In a recent debate on C-SPAN on the condition of the U.S. economy, my liberal sparring partner observed that the bank bailouts and stimulus plans saved us from a second Great Depression.
We’ve all heard that line dozens of times — Barack Obama recites it in nearly every speech he delivers. This claim is what we call a counterfactual — what might have happened if we hadn’t done what we did. The left loves to argue using counterfactuals because — like “climate change” — they are impossible to refute.
No one can say for certain what would have happened in some kind of parallel universe. But getting the story right on this episode of history is a critical issue for American economic policy.
Conservatives must not let the left write the narrative of the financial crisis and the massive and unprecedented government interventions designed to combat it — as they are trying to do.
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