Wait.. Slow Stimulus Spending is a Feature, Not a Bug?

A follow-up to a post from earlier today. From The Economist:

AS CRITICS of the administration's stimulus policy have intensified their attacks, arguing that continued poor economic performance means that fiscal policy has failed, defenders of the policy have been at pains to point out that not very much of the stimulus package has yet found its way into the system. Perhaps 10% of the total resources of the bill have been deployed, and most of the boost from stimulus will be delivered between now and late 2010.

The last sentence should end with 'at which point the economy will have already been in recovery for 18 months'.

The reason that we can conclude fiscal stimulus is not working is not because "continued poor economic performance means that fiscal policy has failed". It is just as easy to argue that the economy would be much worse in the absence of fiscal stimulus. There are just too many confounding factors to rely on just GDP figures.

We can conclude that fiscal stimulus has not worked because the entire argument about how fiscal stimulus works is incoherent and ignores real world facts