Bespoke Investments makes another uncomfortable point today. Losses in the stock market since the stimulus plan was announced are now far larger than the size of the actual stimulus. They say:
While Washington has lauded the $787 spending bill as the medicine that will help bring the economy out of the recession that President Obama 'inherited,' the market is taking a different view. Consider this -- since the spending bill was passed by Congress on February 13th, the S&P 500 has lost over $1.8 trillion in market cap, which is over twice the size of the plan signed into law! The question for economists now is whether or not the positive multiplier effect associated with the spending bill will be enough to offset the negative multiplier effect from the proportionately bigger decline in the value of US equities in the pension funds, IRAs, 401k's, and investment accounts of Americans.
Does the same logic apply to Obama's job creation plan? The stimulus is supposed to provide 3.5 million jobs. After today's dismal employment report, the economy has shed 4.4 million jobs since the recession began in August 2007 with more job losses on the way. That's another negative to worry about.