Just published: Money Well Spent?: The Truth Behind the Trillion-Dollar Stimulus, the Biggest Economic Recovery Plan in History by Michael Grabell.

The author concludes the stimulus package did some good and saved as many as 3 million jobs but the political legacy of the bill may be its most lasting effect.

The Federal Reserve downgraded its outlook for economic growth this year but is slightly more optimistic about the unemployment rate, the Wall Street Journal reports.

The Fed expects the economy to grow between 2.2% and 2.7% this year. That’s down from November’s forecast of between 2.5% and 2.9%. But it sees unemployment falling as low as 8.2%, an improvement from November’s bottom rate of 8.5%.

Jonathan Cohn: “Once again, today’s biggest political news isn’t about the Republican candidates or the President, even though the former are battling in Florida and the latter is about to give the State of the Union address. It’s the latest Gallup survey, which shows economic confidence has risen sharply since August and is now at levels not seen since May. That report is consistent with the latest ABC News/Washington Post poll, in which confidence in the economy reaches its highest rate in months.”

Jonathan Bernstein: “The overall numbers are still not very good. But confidence as measured by Gallup has fully recovered from a summer slump, and is rallying to close to its post-recession highs, and is well above the levels from George W. Bush’s last year in office. For now, anyway.”

Bill Keller:
“There really is a textbook way to fix our current mess. Short-term
stimulus works to help an economy recover from a recession. Some kinds
of stimulus pay off more quickly than others. Once the economic heart is
pumping again, we need to get our deficits under control… So what’s
the problem? Why is our system so fundamentally stuck? Partly it’s a
colossal, bipartisan lack of the political courage required to tell
people what they sort of know but don’t want to hear… But also, I’ve
come to think something is rotten in the state of economics. The dismal
science, as Thomas Carlyle called it, has been ravaged by the same virus
that has corrupted the rest of our national discourse.”

“Economists
don’t live in caves, so there is no reason they should be immune to the
centrifugal politics of this noisy world. Thus serious scholars are
tempted to sign onto ideas that stretch their own credulity, and lesser
economists are thrust forward for their moment of fame as witnesses on
behalf of dubious claims. Economists cluster in ideological think tanks
that promote political conformity rather than intellectual rigor.
Politicians, with no generally accepted consensus to challenge them, can
get away with plucking data out of context to bolster assertions that
are based more on faith than on reality.”

The Economist: “Even as the euro zone hurtles towards a crash, most people are
assuming that, in the end, European leaders will do whatever it takes to
save the single currency. That is because the consequences of the
euro’s destruction are so catastrophic that no sensible policymaker
could stand by and let it happen.”

A euro break-up would cause a global bust worse even than the one in 2008-09. The world’s most financially integrated region would be ripped apart by defaults, bank failures and the imposition of capital controls… The euro zone could shatter into different pieces, or a large block in the north and a fragmented south. Amid the recriminations and broken treaties after the failure of the European Union’s biggest economic project, wild currency swings between those in the core and those in the periphery would almost certainly bring the single market to a shuddering halt.”

“Yet the threat of a disaster does not always stop it from happening. The chances of the euro zone being smashed apart have risen alarmingly, thanks to financial panic, a rapidly weakening economic outlook and pigheaded brinkmanship. The odds of a safe landing are dwindling fast.”

“The biggest single threat to our economy is not Europe’s instability or China’s monetary policy or anything else. It is this partisan paralysis and political cowardice that I think is defining Washington and we just cannot afford to have that continue.”

— New York City Michael Bloomberg, quoted by the New York Daily News, on the failure of the congressional supercommittee.

Bloomberg notes that President Obama routinely describes the recession as both a current condition and an historical event

The president “has toggled between the past and present in the more than 235 references to the economy he has made since Democrats lost control of the House of Representatives one year ago… Obama’s inconsistency could complicate his effort to convince voters the economy has improved and that he deserves a second term, said economists and polling experts. His task, they said, is to talk up the economy, without talking down to the voters who are struggling under it.”

Bill Clinton writes in his new book, Back to Work, that last summer’s political fight over raising the U.S. debt ceiling made the nation look “weak and confused” overseas, the AP reports.

He also “describes the current state of the country as ‘a mess’ and largely blames the anti-government sentiment embodied in the tea party movement that has held sway since the 1980s. But Clinton also criticizes Obama and other Democratic lawmakers for not making a stronger case for the steps they took to stabilize the U.S. economy in 2009, like the bank and auto company bailouts and the $787 billion economic stimulus program.”

The U.S. government reports 80,000 jobs were created last month as the unemployment rate inched down to 9.0%

Greg Sargent foudn this question in the recent Suffolk University poll conducted in Florida: Do you think the Republicans are intentionally stalling efforts to jumpstart the economy to insure that Barack Obama is not reelected?

By a 49% to 39% margin, Floridians said they were, while 12% were undecided.

Steve Benen: “Here’s a suggestion for other pollsters: given these results in one of
the nation’s largest states, and the fact that the charge has been made
by so many prominent political voices, perhaps it’s time to start
putting the question to a national audience?”

Update: National Journal reports Senate Republicans blocked a $60 billion infrastructure bill, making the bill the second piece of President Obama’s jobs proposal to be voted down in the Senate.

The Federal Reserve “significantly reduced its forecast of economic growth through 2013, acknowledging that it had once again overestimated the nation’s recovery from the 2008 financial crisis,” the New York Times reports.

Sen. Dick Durbin (D-IL) told WLS-AM that Senate Democrats do not have enough votes to pass President Obama’s latest jobs bill.

Explained Durbin: “There are some senators who are up for election who say I’m never gonna vote for a tax increase while I’m up for election, even on the wealthiest people. So, we’re not gonna have 100% Democratic senators. That’s why it needs to be bi-partisan and I hope we can find some Republicans who will join us to make it happen.”

Mark Halperin: “Presidents who demand congressional action in a high profile way on
specific pieces of legislation don’t have a very great track record.
While the White House maintains its confident public posture that the
jobs bill (or something like it) will pass, at this point it remains
hard to see how, despite the President’s sales job.”

While extolling small business “might be a good way for politicians to win elections,” Bloomberg Businessweek notes that “the notion that small business is the force behind prosperity is not true.”

“Most small employers are restaurateurs, skilled professionals or craftsmen (doctors, plumbers), professional and general service providers (clergy, travel agents, beauticians), and independent retailers. These aren’t sectors of the economy where product costs drop a lot as the firm grows, so most of these companies are going to remain small.”

Michael Lewis interviews former California Gov. Arnold Schwarzenegger (R) on the “nightmare scenario” that has become the state’s economy.

“In November 2005 he called a special election that sought votes on four reforms: limiting state spending, putting an end to the gerrymandering of legislative districts, limiting public-employee-union spending on elections, and lengthening the time it took for public-school teachers to get tenure. All four propositions addressed, directly or indirectly, the state’s large and growing financial mess. All four were defeated; the votes weren’t even close. From then until the end of his time in office he was effectively gelded: the legislators now knew that the people who had elected them to behave exactly the way they were already behaving were not going to undermine them when appealed to directly.”

In a Washington Times op-ed, Sen. Jim DeMint (R-SC) criticized the Obama administration’s investments in green companies like Solyndra, which recently declared bankruptcy.

Wrote DeMint: “Billions more have been wasted by politicians betting on favored companies and making Washington bigger, using the brute force of government to force liberal preferences into the economy. Mr. Obama calls them ‘investments,’ but this is really venture socialism.”

A Bloomberg survey of economists concludes President Obama’s $447 billion jobs plan “would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year.”