CBO: President's "Stimulus" Hurts Long-Term Economic Growth

Via Glenn Reynolds, Peter Suderman at Reason has a video of CBO Chief Douglas Elmendorf testifying before the Senate Budget Committee last week:

The quote that matters starts around 1:25, when Elmendorf says that, according to CBO's estimates, with the stimulus legislation in place, "the level of GDP would be a little lower at the end. That is, a net negative effect on the growth of GDP over 10 years." Elmendorf then confirms that CBO estimates that the economic drag will continue in the following decade:

SESSIONS: And in the next 10 years, since you're carrying that debt and paying interest on it and the stimulus value is long since gone, it would be a continual negative of some effect?

ELMENDORF: Yes, it would represent a drag on the level of GDP beyond that, if no other actions were taken.

[...]

Still, it's worth noting, if only because even the mildly Keynesian congressional scorekeeper agrees that borrowing $800 billion dollars ultimately creates a drag on the economy and a net loss in economic performance relative to what otherwise might have been. And yet the administration went ahead with the legislation anyway, arguing that it would be more or less a free lunch in the long run

Screwing up the economy for a decade - that's a record the president should be proud to run on.

Hat Tip: Ed Lasky