[Another travel day, and then hopefully back to normal tomorrow.]
Did the stimulus work? According to a collaboration between Fitch Ratings and Oxford economics, the answer is yes:
Government stimulus moves may have ended recession, by Jim Puzzanghera, Los Angeles Times: Without the unprecedented stimulus actions by the federal government triggered by the 2008 financial crisis, the Great Recession might still be going on, according to a study by Fitch Ratings. ...
The boost from those policies helped the nation's gross domestic product increase 3% in 2010 and 1.7% last year; absent the stimulus, the U.S. "might still be mired in a recession," according to the study, done in conjunction with Oxford Economics.
The U.S. economy would have seen little or no growth the last two years without the policies, the report says, and those actions appear "to have significantly softened the severity of the decline" in GDP in the year immediately after the recession ended in mid-2009.
Though the Fed's monetary policy actions were helpful, fiscal stimulus by Congress and the White House "had the strongest positive impact on consumption during the recent recovery," the study found.
This is a graph from the Fitch report (which I got by email, available here with registration):
From the Fitch summary of the report:
Stimulative Policies Driving Recovery: To better understand the future sustainability of the current U.S. economic recovery, Fitch Ratings and Oxford Economics have collaborated to analyze how much of the U.S.’s postcrisis economic growth is attributable to policy actions by the federal government and the Federal Reserve. Oxford Economics’ Global Economic Model (GEM) suggests that the U.S. policy response to the recession increased aggregate GDP by more than 4% two and three years after the trough of the last crisis than otherwise would have been the case (see graph...). These policies helped to support GDP growth of 3.0% in 2010 and 1.7% in 2011, implying that the U.S. might still be mired in a recession absent this stimulus. ...
Credit Implications: The current level of uncertainty associated with the future growth trajectory of the U.S. economy increases risk in general. This uncertainty, in turn, has the potential to affect the creditworthiness and credit ratings of all U.S. sectors, including corporates, municipal finance, and structured finance. A scenario of lower U.S. growth could also have global rating implications, particularly on foreign firms that rely on the U.S. as an export market. Until it becomes clearer that the economy can continue to grow sustainably without the support of stimulative policies, Fitch anticipates limited future rating upgrades within the sectors most closely tied to the U.S. economy.