One year after US President Barack Obama passed his massive stimulus bill, most experts agree the economy would be worse off today than had he done nothing back then.

But the package did not come without a price and is no panacea for an ailing economy.

"One year later, it is largely thanks to the Recovery Act that a second depression is no longer a possibility," Obama said on Wednesday of the US$787-billion bill enacted a year ago in a bid to avert economic disaster.

"It's one of the main reasons the economy has gone from shrinking by 6 percent to growing at about 6 percent. So far, the Recovery Act is responsible for the jobs of about 2 million Americans who would otherwise be unemployed," he said.

But despite Obama's touting of the bill, some economists are at odds with the legislation.

Andy Busch, global foreign currency and public policy strategist at BMO Capital Markets, said while the stimulus' tax cuts made sense, more permanent tax relief would have better helped the economy.

"When you don't make tax cuts permanent, people have a tendency to save the money and pay down debt instead of normalizing it into their spending habits," he said.

And while credited with preventing the economy from spiraling out of control, he said, much of the government's spending is contributing to a massive deficit -- by 2019 the interest alone will cost US$800 billion a year, that will stunt future economic growth.

The huge US debt could spark a double whammy of higher taxes and inflation that could deal a serious blow to Americans' earnings, he said, although other experts say the debt is manageable in a stable economy such as the United States.

"The major problem is that (the stimulus) has to be paid for...and that will dampen future economic growth," he said, adding that long term economic risks are not worth the short term gains.

Other experts are less critical.

"I believe the stimulus has helped at the margin, but a major portion of the funds still have not been spent," said Barry Bosworth, a fellow at the Brookings Institution.

The stimulus effort has been bedeviled by high expectations of those who believed it would jolt the economy back to life like a shot of adrenaline. And because that didn't happen, many Americans conclude the package has failed.

"Plus, the administration was too optimistic in early 2009 with its forecast," he added.

Diane Swonk, chief economist at Mesirow Financial, said much of the country's recent growth can be attributed to the Recovery Act's tax cuts, along with other programs such as Cash for Clunkers.

In spite of the looming deficit, the bill was worth it, she said.

"A recession is costly, but a depression is even more costly," she said.

Nevertheless, some argue that the stimulus should have been sooner, smaller and better targeted.

Fed chief Ben Bernanke called for a stimulus bill of around US$400 billion, about half of what Congress passed, in November 2008, a few months before the Recovery Act was implemented. If Congress had acted more quickly, the Great Recession would have been less severe, she said.

And the final legislation contained untold millions in earmarks, spawning the term "porkulus," coined by the bill's opponents.

"Was the stimulus bill the most efficient? No," she said, but added that the alternative would have been double the current rate of unemployment and an even greater cost to the federal budget deficit.

Dean Baker, co-director of the Center for Economic and Policy Research, said the stimulus has made a positive impact, but with millions out of work -- and high unemployment is expected to continue at least into next year -- more is needed.

That could include spending more money, implementing more aggressive monetary policy or targeting inflation to keep it in check. Another step might be reducing the value of the dollar to boost exports, he said.

Ben Carliner, director of research at the Economic Strategy Institute, said while the stimulus has played a significant role in stabilizing the economy, the recovery is still fragile, making it premature to begin withdrawing stimulus.

Now that the worst of the crisis was over, the administration has the opportunity to craft further stimulus packages that build long-term productivity of the economy, while still creating jobs in the short term, he said.

One example is Wednesday's awarding of TIGER grants, funds for transportation infrastructure investment, to projects nationwide.

In addition, Americans are split over whether the stimulus has had an impact.

A new Rasmussen poll found that 35 percent of those asked said the plan has helped the economy, but almost as many as 33 percent said it hurt while 26 percent believe the impact was nil.

Those findings mark a drop from those in favor at this time last year, when 38 percent of those questioned said the act would help the economy, 29 percent said it would hurt and 24 percent said it would have little impact.

(Xinhua News Agency February 20, 2010)