Congressional Budget Office sees Overall Growth due to Stimulus

From the Feb 11 Congressional Budget Office, an independent group the oversees gov't actions and proposals:

"Taking all of the short- and long-run effects into account, CBO estimates that the
legislation implies an increase in GDP relative to the agency’s baseline forecast of
between 1.4 percent and 3.8 percent by the fourth quarter of 2009, between 1.1 percent and 3.3 percent by the fourth quarter of 2010, between 0.4 percent and 1.3 percent by the fourth quarter of 2011, and declining amounts in later years (see Table 1). Beyond 2014, the legislation is estimated to reduce GDP by between zero and 0.2 percent....

Correspondingly, the legislation would increase employment by 0.8 million to 2.3
million by the fourth quarter of 2009, by 1.2 million to 3.6 million by the fourth quarter of 2010, by 0.6 million to 1.9 million by the fourth quarter of 2011, and by declining numbers in later years. The effect on employment is never estimated to be negative, despite lower GDP in later years, because CBO expects that the U.S. labor market will be at nearly full employment in the long run. The reduction in GDP is therefore estimated to be reflected in lower wages rather than lower employment, as workers will be less productive because the capital stock is smaller."
http://www.cbo.gov/ftpdocs/99xx/doc9987/Gregg_Year-by-Year_Stimulus.pdf

The last sentence of each paragraph is critical, and is what is being taken out of context all over the place. In both cases, the CBO is saying that in the long-term, the effects of the stimulus will taper off to eventually be effectively unnoticeable; that in the long-run, the economy will recover from this downturn on its own.

Assuming that we are not actually facing the leading edge of a complete failure of western society right now, that should be a given.

The GDP numbers do suggest that in the mid-term, we may actually see a 0.0 to 0.2 percent decrease in annual GDP (which, according to other sources, would even out by 2019), but they are *not* saying that the stimulus will "cause a reduction in our economy" as a whole, despite what some senators and journalists are currently claiming.

In the end, the report suggests that in exchange for a combined 2.9 - 8.4% GDP increase over the baseline forecast for the next 3 years along with increased employment in the millions, we may see a <1% decrease in total GDP spread over the years between 2014 and 2019.