Obama presser

During yesterday's press conference President Obama was asked the following question:

Is [the new tax/unemployment benefits deal] going to do more to boost growth and create jobs than your Recovery Act?

Although a better question might have been why a $800+ billion stimulus package was necessary at a time of 7.7 percent unemployment, but preventing a tax hike that would grant $75 billion to the Treasury is unwise at a time of 9.8 percent unemployment, the answer was still noteworthy:

This is not as significant a boost to the economy as the Recovery Act was, but we’re in a different situation now. I mean, when the Recovery Act passed, we were looking at a potential Great Depression and we might have seen unemployment go up to 15 percent, 20 percent -- we don’t know. In combination with the work we did in stabilizing the financial system, the work that the Federal Reserve did, that’s behind us now.

While Obama hints at the role of the Fed's lowering of interest rates as well as the TARP initiative as other key factors in preventing this Great Depression, both were in place by the time Obama took office. Therefore, if in February 2009 -- when the stimulus package was passed -- the country faced 15-20 percent unemployment, the stimulus package must have been the only factor which averted this outcome. That's quite a bold statement, and a break with Obama's own economists who predicted a maximum unemployment level of 9 percent absent the stimulus.

Notably, when later asked if the tax/unemployment benefits deal will bring down the unemployment rate Obama demurred, stating that "a lot of economists out there have been struggling with that question" and that he is "not going to make a prediction" -- even though he felt comfortable predicting what would have happened without the stimulus package.