WH: Stimulus ‘Widely Recognized to Have Broken the Back of Recession’
(CNSNews.com) - White House Press Secretary Jay Carney said last week that the $831 billion economic stimulus law that President Barack Obama signed on February 17, 2009 is “widely recognized to have broken the back of the recession.”
When President Obama signed the law three and a half years ago, the Congressional Budget Office estimated it would cost $787 billion. Since then, the CBO has revised its estimate, eventually concluding the stimulus cost $831 billion.
In January 2009, the month before Obama signed his stimulus, the national unemployment rate was 7.8 percent, according to the Bureau of Labor Statistics. It has not dropped below 8 percent in any month since then. In February 2009, it hit 8.3 percent. In June 2012, it was 8.2 percent.
In January 2009, there were 12,049,000 unemployed people in the country, meaning there were that many people age 16 and older who wanted a job, had actively sought one in the previous four weeks, but had not been able to find one. In June 2012, there were 12,749,000 unemployed people—or 700,000 more than there were the month before Obama signed the stimulus.
The percentage of the American population actually holding jobs and the percentage of the population participating in the labor force (those either holding a job or actively looking for one) have both declined since January 2009. In that month, 60.6 percent of Americans 16 or older were working. In June 2012, 58.6 percent of Americans 16 or older were working. In January 2009, 65.7 percent of Americans 16 or older either held a job or were looking for one—and thus were participating in the labor force. By June 2012, that had dropped to 63.8 percent.
In January 2009, 142,187,000 Americans had jobs. In June 2012, 142,415,000 Americans had jobs—an increase of just 228,000 in the number of employed Americans.
“There's been some discussion about the Recovery Act,” Carney said at the July 12 White House briefing. “The entire purpose of the Recovery Act was to grow the American economy and grow American jobs here at home, and that's what it did. It's widely recognized to have broken the back of the recession, to have reversed the situation where we were losing jobs at a rate of 750,000 per month to one where we've created over 4.2 million private sector jobs. The Recovery Act alone is viewed by outside economists as having saved or created over 3 million jobs.”
The Congressional Budget Office published its most recent study of the American Recover and Reinvestment Act—the Obama stimulus—in May. That study said the $831 billion stimulus’s maximum impact on employment occurred two years ago in the third quarter of 2010. At that time, according to CBO’s estimates, there were between 700,000 and 3,600,000 people employed in the United States who would not have been employed were it not for the stimulus.
As of the current quarter—the third quarter of 2012—the stimulus can claim credit for between 200,000 and 1,000,000 people being employed who otherwise would not be employed, according to CBO.
At its maximum best-case, ob-creating power, according to CBO’s estimates, the Obama stimulus created 3.6 million jobs for $831 billion—or $230,833 per job.
In the current quarter—with between 200,000 and 1,000,000 jobs saved or created by the stimulus—the best the stimulus can claim is that it has sustained 1,000,000 jobs at a cost of $831,000 per job.
It is true that the first two quarters of 2009 were recessionary quarters, with seasonally adjusted real Gross Domestic Product declining by -6.7 percent in the first quarter 0f 2009 and -0.7 percent in the second quarter, according to the Bureau of Economic Analysis. But the National Bureau of Economic Research (NBER) said the recession ended in June 2009.
Since June 2009, according to NBER, the U.S. economy has been in an “expansion” not a recession.
During the post-stimulus “expansion” of the U.S. economy, not only has unemployment remained above 8 percent in every month, real GDP has never grown by as much as 4 percent.
In the past 7 quarters, according to the BEA, seasonally adjusted real GDP has only grown at an annual rate of as much as 3.0 percent in one quarter. Since the third quarter of 2010, it has grown sequentially by 2.5 percent, 2.3 percent, 0.4 percent, 1.3 percent, 1.8 percent, 3.0 percent, and 1.9 percent.