Economics has various schools of thought. The Keynesian school, popular among Democrats, believes that, if the government spends money that it doesn't have, then, through a multiplier effect, the economy will grow. Thus, back in early 2009, economists working for Pres. Obama calculated that, without additional government spending, the unemployment rate would follow the light blue curve. With the stimulus spending, they calculated that it would follow the dark blue curve, never going over 8% and dropping to 5.5% by today. The stimulus passed but the actual unemployment rate is shown by the red dots (click on any figure to enlarge):
If there were as many people in the workforce today as there were when Obama took office, the unemployment rate would be 10.7%. The rate has drifted down over the past two years only because people have left the workforce: giving up, retiring, or going on disability.
How large was the actual stimulus? This chart shows deficit spending since 2000 with Obama's actual deficits shown by orange bars. The red and pink bars are, respectively, projections by CBO and the White House:
Liberals like to claim that deficits are due to Bush's war spending. This chart shows otherwise. As Pres. Bush's war spending ramped up, deficits dropped. Deficits started increasing again only after Democrats took control of both houses of Congress in 2007.
Now that Democrats have had this four year experiment with extreme deficits while the economy had the worst recovery since the Great Depression, can we declare Keynesianism dead?
Of course, we can't. Keynesianism justifies their power.