John Berry: Many Holes in GOP Mantra that Stimulus ‘Failed’
JB:
Many Holes in GOP Mantra that Stimulus ‘Failed’: It’s likely that in the run-up to the 2012 election, we will be treated to the Republican mantra that the federal government is broke and that President Obama’s $800 billion stimulus package “failed.” By any fair measure, both of those assertions are nonsense.... Boehner and others, such as Mississippi Gov. Haley Barbour, a Republican presidential aspirant, are trying to turn the reality of the stimulus on its head: More government spending destroys jobs and slashing spending creates them, they claim....
[O]n the local level, it seems even conservatives have no real doubt that federal spending can create jobs. What about at the national level?
The Congressional Budget Office certainly has no doubts about it. A CBO report last month said that provisions of the American Recovery and Reinvestment Act, the stimulus bill passed in early 2009, had the following effects in the fourth quarter of calendar year 2010:
Raised the level of inflation-adjusted gross domestic product by between 1.1 percent and 3.5 percent.
Lowered the unemployment rate by between 0.7 percentage points and 1.9 percentage points.
Increased the number of people employed by between 1.3 million and 3.5 million.
Increased the number of full-time-equivalent jobs by 1.8 million to 5.0 million as additional workers moved from part-time to full-time work.
The only sense in which the stimulus failed was that the unemployment rate did not fall to 8 percent by the end of last year, as administration economists originally predicted, because the recession that followed the financial crisis turned out to be much more severe than expected. The actual unemployment rate in the fourth quarter was 9.6 percent. The CBO analysis indicated that without the stimulus, the rate would have been between 10.3 percent and 11.5 percent. And the mid-point of the estimate for the number of additional people with jobs? More than 2 million...
