Did the stimulus work?

Economics Economics Questions
1

I was reading this article in the Washington Post which reviews the 9 “best” studies that address this question. Of course all these studies use econometrics or modeling (I thought they were the samething) to draw their conclusions but short of interviewing all the employers in the US how accurate or precise can these econometerics and models be and how serious should we take their conclusions?

Also there seems to be a debate between which approach is more useful, econometerics or models. Econometerics seems to rely on holding certain variables constant while models seem to rely on counter-factuals which are impossible to know. Now I know the people here would say that both approaches are inadequate but if one had to choose between the two which one is more useful and why?

2

Notice how often these studies involve “calculating multipliers” or some such tactic. In other words, as a blogger at Heritage put it:

3

Does Heritage have a legitimate reason to believe that government spending doesn’t create jobs? I thought that the institution was filled with neo-classicals and monetarists, rather than Austrians, and in both of those models the only reason that government spending wouldn’t create jobs is because:

  1. The borrowing government has to do drives up interest rates too high for private investment (something that is obviously not happening right now)

  2. The economy is recovering anyway (something which is doubtful that would have been happening that much faster with the stimulus)

  3. The discretionary spending leads to an increase in things like regime uncertainty (something that obviously has happened)