dr. christina romer. >> absolutely. and by structuring it the way we did, we didn't -- it allowed them -- the debt, you know -- to hide the impact that it was going to have on the defic over time. >> that was the big reason for it. >> yeah. >> frankly fooled the american people. i want to get into this -- we use this word stimulus. we've kind of ignored the word countercyclical, but i'm a te h teacher. if this was the consumption of -- by state government before the recession, jobs drop off, that's what they're -- if this was the consumption by local government before the recession and this glass is what they're -- a drop-off. if this is the consumption by private corporations, small business firms, and this is it after th recession begins. if this is consumption by individuals in the economy like myself is about to borrow some money, this is our consumption after the recession began. this ilgreats the problem, i think, which is economy is about demand for product. and all those components of the economy, demand has dro

which basically says the same thing you were saying, dr. romer. thank you for your hard work. representative cummings. >> thank you very much, madam chair. i told you. i told you that they would say the sky is falling and that the progress that we have made the president and the new administration had nothing to do with it. i told you. you said something that intrigued me, a lot really. but you talked about small business lending and how significant that would be. i'm going back to some of the things mr. brady was talking about. we had the deserve in my district about three weeks ago and had businesses come in and one of the things they said is it we could just get access to capital, they are -- one lady stood up and said i have opportunities at my fingertips but just can't get the capital. and so could you comment on that briefly. then i want to ask you about the whole idea -- this is the major question, a lot of people think that democrats, some of us, are not concerned about the deficit. and we are concerned about the deficit. you talked about how it's important to create j

dr. christina romer. >> absolutely. and by structuring it the way we did, we didn't -- it allowed them -- the debt, you know -- to hide the impact that it was going to have on the deficit over time. >> that was the big reason for it. >> yeah. >> frankly fooled the american people. i want to get into this -- we use this word stimulus. we've kind of ignored the word countercyclical, but i'm a te h teacher. if this was the consumption of -- by state government before the recession, jobs drop off, that's what they're -- if this was the consumption by local government before the recession and this glass is what they're -- a drop-off. if this is the consumption by private corporations, small business firms, and this is it after the recession begins. if this is consumption by individuals in the economy like myself is about to borrow some money, this is our consumption after the recession began. this ilgreats the problem, i think, which is economy is about demand for product. and all those components of the economy, demand has

romer testified about the findings before the joint economic committee. this portion is about 35 minutes. >> thank you, madam chair. >> thank you very much. dr.oammerromer,he long-term unemployment rate dung this recession is at a historic high. and in your report, you mentioned that the historical relationship between unemployment re increases and output declines did not hold during this recession andhat the unemployment rate rose much more than expected given the decline in output. do you still believe that this rule of thumb is holding? >> that's an excellent question. it does go back to how did some of our forecasts not come to be. part of it was what we discussed at length with mr. brady about the deterioration in the economy, just much faster than we or any private-sector forecasters were calling for. but e other piece of that was an unusually bad behavior of unemployment. that given what's happened to gdp, the unemployment rate has risen more than would have be expected. and the economic report, weay it's probably abo bout bout a pa point and a half higher than you would expect. i can't help but note that law is named after the previou