Romer: We’ve always known there’d be no immediate fiscal impact from stimulus

The Obama administration has known all along that the economic stimulus plan for which it had pushed would not have much of an effect for at least half a year, one of the administration’s top economic advisers said Sunday.

“We always knew we were not going to get all that much fiscal impact during the first five to six months,” Council of Economic Advisers Chairwoman Christina Romer told the Financial Times. “The big impact starts to hit from about now onwards.”

But while the administration had never said it expected an immediate economic recovery due to the stimulus, it had often talked up the immediate relief the $787 billion package would provide. Indeed, President Obama and many of his advisers had talked up the “shovel-ready” projects in the bill just waiting for the money to be allotted.

National Economic Council (NEC) Chairman Lawrence Summers said in February consumers would see the effects of the stimulus “almost immediately,” and Office of Management and Budget (OMB) Directer Peter Orszag said the impact of the stimulus could be seen within “weeks to months.”

Romer defended that stimulus amidst an unemployment rate that’s slid steadily higher, and other persistently negative economic indicators.

“It should make a material contribution to growth in the third quarter,” Romer said, adding that stimulus spending would “ramp up strongly through the summer and the fall.”