What If?

 

Today marks the one-year anniversary of the signing of the American Recovery and Reinvestment Act of 2009 (ARRA or Recovery Act). We're going to put up some more substantive posts later, but I thought these graphs in the New York Times really get to the heart of the "did it work" question.

Imagine if, one year ago, Congress had passed a stimulus bill that really worked.

Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.

If that had happened, what would the economy look like today?

Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.

Despite the nearly 2 million jobs that wouldn't have existed without the act or the additional 2 to 3 percentage points in additional GDP growth, only 6 percent of the public thinks the Recovery Act has already created a substantial number of new jobs, while only 41 percent think it eventually will.

This is probably driven by the current awful unemployment rate, but the enormity of the gulf between ARRA (and economy watchers) and the general public is striking. And this is all despite the fact that Recovery Act spending is the most transparent in history.

Image by Flickr user smcgee used under a Creative Commons license.

(Craig Jennings 02/17/10)

Comments

More is involved in creating

More is involved in creating a job than just paying salary/fringe. The people who are going back to work through ARRA are working class people who otherwise would be exhausting their twice-extended unemployment benefits right now. As part of a national network which has hired many people in so-called "green" jobs, I can attest to the many contractors, carpenters, and general laborers who are working today because of the stimulus bill. What we are not allowed to count are the many jobs our suppliers might have had to cut - building and construction supply firms, primarily - if not for our purchases from them. As for "having more money to take home," a significant amount of the ARRA benefit has been in a small decrease in income taxes paid by individuals. So small that most Americans do not even think they received a tax cut. A bad thing? No. A good thing. Why? Because that money was not spent all-at-once on new foreign-made flat screen TVs, as Bush's "tax rebates" were to a large extent. Instead that money was spent on groceries, entertainment, lattes, and the like...all keeping working class people employed. Speaking of the Bush "stimulus," where were all of these critics when he borrowed money from China to send everyone those rebate checks? Has anyone even considered measuring the impact of that failed attempt to stop the downward spiral created by fraudulent banking and mortage practices or is it assumed that it had an impact because people were able to hold it in their hands and plunk it down all at once?

Something else. I read in

Something else. I read in the transparency report that $31,000,000,000 had produced 52,000 energy related jobs last year. That means that it cost almost $600,000 for each job it created. Where do these estimates come from? How long will that $600,000 last us? Will it supply a person's wages for 15 years (based on the average income)? If not, $600,000 hardly seems like a cost-effective way to produce jobs. Why not leave that $31,000,000 in tax payer's pockets so that they can create demand that will create more cost effective jobs?

Too bad there's not some sort

Too bad there's not some sort of filter here where spammers are blocked from posting their crap online. No one ever clicks on these links, except the idiots who posted them. Back on topic. I still can't tell how the ARRA has worked. Perhaps it's outperformed other government efforts, but bad is still bad. Sometimes doing nothing is a good thing - especially if it means I have more money to take home each payday.

Post new comment

The content of this field is kept private and will not be shown publicly.
By submitting this form, you accept the Mollom privacy policy.