The American Recovery and Reinvestment Act (more popularly called the 2009 stimulus) turns three in mid-February. We evaluated the legislation on its first and second anniversaries; our assessment on its third is below based on four criteria: timeliness, unemployment, transparency, and preventing waste.
Timeliness. Lawmakers promised the stimulus would have a very quick impact on the economy. Then-House Majority Whip Jim Clyburn (D-SC), in an MSNBC interview on Feb. 11, 2009, said improvements would been seen in as little as a week: “If we pass this package by Friday afternoon, I’m convinced that by Friday next week, you’ll begin to see some positive stuff coming out of it…”
At the two-year mark, only 78.7 percent ($619.1 billion) of the stimulus funds had been paid out. Since last February an additional $324.7 billion in benefits (for an overall total of $743.8 billion) have been disbursed.
Still, that is almost $100 billion shy of the $840 billion that has been earmarked for the stimulus. The Congressional Budget Office (CBO) “estimates that nearly 90 percent of ARRA’s budgetary impact was realized by the end of fiscal year 2011 and that the law added $733 billion to budget deficits over the 2009–2011 period.”
Since the stimulus was supposed to be a temporary two-year program, it still gets an “F” for timeliness.
Unemployment. In selling the stimulus, former White House senior advisor David Axelrod said told NBC’s “Meet The Press” on Feb. 15, 2009, “[W]ithout [the stimulus], that’s where we were looking — double-digit unemployment …” The jobless rate was 8.2 percent at the time. And former Director of the Council of Economic Advisers Christina Romer and former Economic advisor to Vice President Biden, Jared Bernstein, reported the President’s expectations for the stimulus was to create 3 million to 4 million jobs.
The stimulus didn’t keep unemployment from hitting double digits; it didn’t create jobs as quickly as promised and also has not resulted in a net increase in U.S. employment. Jobs are trickling back now – three years later – but employment growth can be characterized as tepid at best.
Since the bill was signed in February 2009, the U.S. has experienced a net job loss of 1.15 million jobs (the country has lost jobs in 16 of the 36 months since the stimulus was enacted). The unemployment rate hit 10 percent in October 2009, but has not bounced down by any stretch of the imagination; it has remained around 8 or 9 percent since then (the lowest being 8.3 percent in January 2011).
In 2009 the White House released a paper outlining the number of jobs that would be created or saved in each state. In the last year, 46 states have added jobs. To compare the predictions to the current statistics on job creation in your state, click here.
Transparency. The 2009 stimulus ranked among the all-time largest budget items. Americans, nervous about such broad intervention, were promised the stimulus would be “transparent and accountable.” The administration even built a slick website to help track the funds.
Not much has changed here except it is worth applauding the White House for continually maintaining and updating its website – even three years later. While many in the press may not be paying attention, taxpayers still have a pretty reliable means for tracking stimulus spending.
Preventing Waste. At the bill’s signing ceremony, President Obama said, “With a recovery package of this size comes a responsibility to assure every taxpayer that we are being careful with the money they work so hard to earn.” So he put Vice President Biden in charge of combating stimulus waste.
There is now a whole book devoted to this issue. According to a Wall Street Journal book review of “Money Well Spent” by Michael Grabell, taxpayers spent $783,000 “to study why young people consume malt liquor and marijuana,” $219,000 “to study the ‘hookups’ of college students,” and $92,000 for Army Corps of Engineers “costumes for mascots like Bobber the Water Safety Dog.”
Furthermore, the stimulus has added slightly more to deficits than initially anticipated. According to the CBO, “[T]he law added $733 billion to budget deficits over the 2009–2011 period. When ARRA was enacted, CBO and JCT estimated that it would increase deficits through fiscal year 2011 by $719 billion…”
Read Entire Story: Bankrupting America