Assessing impact of fiscal stimulus not easy.

Getting economies to grow isn’t easy. Just ask central bankers. They tried, oh how they tried — cutting the price of money to the bone with their subterranean interest rates and unconventional policies. And what did they get for their efforts? Not robust economic growth, but year after year of “serial disappointment,” to quote Bank of Canada Governor Stephen Poloz.

At the height of their disillusionment, they called in the cavalry. Poloz last spring said that the low- rate, lowgrowth world was “exactly t he setting where f i scal policy is its most effective and … where monetary policy is least effective.”

Last September, U. S. Federal Reserve chair Janet Yellen said that “there are ways in which the response of fiscal policy to shifts in the economy could be strengthened, which could help take some burden off monetary policy.”

Translated from the ever-convoluted Yellen- ese, that sentence means, “Help me. Please.”

Surprise, surprise, politicians have proven only too willing to rise to the challenge and spend money. In their first budget last spring, the federal Liberals decided to spend $ 30 billion more than the government would earn in fiscal 2016. The deficit projected in the most recent, second budget shrank a little, to $28.5 billion in fiscal 2017. But we’re still looking at nearly $ 100 billion added to federal debt through fiscal 2021.

Meanwhile, in the U. S., Donald Trump won t he presidency on promises that would probably add several trillion dollars to the national debt over the next decade.

He’s vowed to cut taxes, spend a trillion dollars on infrastructure, and create “millions and millions of jobs.” Fiscal stimulus like the world has never seen! Is any of this working? Well, growth in Canada and the U. S. is picking up, but how much of that is down to fiscal stimulus? In Canada, the best you can say is that it’s hard to tell. In the U. S., it’s downright impossible, because Trump hasn’t done anything yet.

Let’s look at Canada, though. The simplest spendi ng impact to measure should be the direct kind, which is often considered analogous to just dropping cash from an airplane and letting folks blow it. But it’s not, really.

For instance, the new Canada Child Benefit, a pillar of the 2016 budget, was slated at $ 22.4 billion last year. If that money fell from a plane and got spent by the happy citizens below, it would amount to maybe one per cent of GDP. But the CCB isn’t all new spending — the program consolidates old Conservative schemes. Payments also didn’t start until the middle of the year. Meanwhile, the government phased out some benefits to couples with kids, like the fitness tax credit and income splitting, which alone saved almost $2 billion.

All in, the net economic impact might have ended up being 10 or 20 basis points added to GDP last year. But remember, that was a onetime boost. And its relative contribution to GDP has already declined, since the Liberals stopped indexing child benefits to inflation.

Government giveth, and government taketh away.

The impact of infrastructure spending — another big part of the federal stimulus plan — is even foggier to fathom. The government applies a multiplier factor to the spend, which is intended to reflect the time- delayed GDP benefit of new roads, buildings, networks, etc. The 2016 federal budget assumed a 0.9- per- cent multiplier for the nearly $ 4 billion in infrastructure spending that year, creating a notional 20 bps boost to GDP. This year, the 2016 spend plus another $7.3 billion in infrastructure was supposed to boost GDP by twice as much — 40 bps — assuming a higher multiplier of 1.7.

So let’s say we accept the multiplier effect (though we have to also accept that the infrastructure money is wellspent). There is still no way infrastructure spending will boost GDP by 40 points this year.

That’s because of a very practical problem with i nfrastructure spending: you can’t do it quickly, as the Liberals have discovered to their chagrin. So far, only a very small fraction of money earmarked for 2016 has made it into actual projects. That pushes back future spending and its putative impact — not just the economic boost for 2017, but for every year down the line in the government’s 10- year, $ 120- billion infrastructure program.

Still, compared with Trump’s progress, Canada looks downright accomplished. His administration’s legislative bumbling and political brinkmanship have put his promised tax cuts — vague as they have been and are — in jeopardy. As for that trillion dollars on infrastructure — well, it’s in the ether. Last week Transportation Secretary Elaine Chao offered what one report called “the most detailed timetable” yet for an infrastructure plan. She said it would be released “later this year.”

The i r ony of all t his stumbling is that the fiscal stimulus meme has already jumped the shark. Yellen changed her tune about it back in December, saying it probably wasn’t needed. Canada’s growth has picked up substantially since last spring — 2.3 per cent in January, the fastest rate since 2011.

Maybe it’s time for our respective governments to simply put away their stimulus packages and admit defeat — while declaring victory, of course.