Here are the latest CBO forecasts of the output gap and unemployment rate, as well as counterfactual gap and rate that would have taken place in the absence of the stimulus package.
Source: IMF, Global Economic Policies and Prospects: Note by the Staff of the International Monetary Fund, March 13-14, 2009.By the way, previously I’ve argued that the critique of fiscal policy as being ill-timed was largely irrelevant if the negative output gap is long-lived (as it is in the CBO projections). But this paper concludes:
This paper has explored the conventional wisdom that monetary policy in the G7 is a reliable countercyclical tool while discretionary fiscal policy fails to provide fiscal stimulus during downturns. The analysis confirms that monetary policy has been consistently timely and strongly countercyclical in downturns across a range of measures. The assessment of fiscal policy, however, is more nuanced than its common perception. Discretionary fiscal actions have mostly been delayed and pro-cyclical in continental European countries and Japan, but have generally been countercyclical and more timely in Anglo-Saxon countries….
So I am more sanguine than others about what fiscal policy can accomplish in the US.