CBO: Stimulus bill created up to 2.1 million jobs

[SkinsHokieFan]

Looking forward to this discussion

http://www.msnbc.msn.com/id/35543310/ns/business-economy_at_a_crossroads

WASHINGTON - The massive stimulus package passed last year to blunt the impact of the worst U.S. recession in 70 years created up to 2.1 million jobs in the last three months of 2009, the non-partisan Congressional Budget Office said Tuesday.

The package boosted the economy by up to 3.5 percent and lowered the unemployment rate by up to 2.1 percent during that period, CBO said.

The report comes as President Barack Obama and his fellow Democrats are pushing further measures to bring down the 9.7 percent unemployment rate before the November congressional elections.

The $787 billion price tag of the package, officially called the American Recovery and Reinvestment Act, has prompted a growing backlash from voters worried about record budget deficits. Republicans have labeled the package a failure, though economists on the left and right say it helped ward off a depression.

CBO's new report closely resembles its initial estimates from March 2009, shortly after Obama signed the bill into law.

"In CBO's judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects" of the stimulus, the research office said.

Click link for rest

[SkinsHokieFan]

Actual words of the CBO

http://cboblog.cbo.gov/

CBO’s Estimates of ARRA’s Impact on Employment and Economic Output

Looking at recorded spending to date as well as estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law’s impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy.

On that basis, CBO estimates that in the fourth quarter of calendar year 2009, ARRA added between 1.0 million and 2.1 million to the number of workers employed in the United States, and it increased the number of full-time-equivalent (FTE) jobs by between 1.4 million and 3.0 million. Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.

CBO also estimates that real (inflation-adjusted) gross domestic product (GDP) was 1.5 percent to 3.5 percent higher in the fourth quarter than would have been the case in the absence of ARRA.

Data on actual output and employment during the period since ARRA’s enactment are not as helpful in determining ARRA’s economic effects as might be supposed, because isolating the effects would require knowing what path the economy would have taken in the absence of the law.

Because that path cannot be observed, the new data add only limited information about ARRA’s impact. Economic output and employment in 2009 were lower than CBO had projected at the time of enactment. But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects of ARRA.

Limitations of Recipients’ Estimates

CBO’s estimates differ substantially from the reports filed by recipients of ARRA funding. Those recipients reported that ARRA funded nearly 600,000 fulltime-equivalent (FTE) jobs during the fourth quarter of 2009. Such reports, however, do not provide a comprehensive estimate of the law’s impact on employment in the United States. That impact may be higher or lower than the reported number for several reasons (in addition to any issues about the quality of the data in the reports):

Some of the reported jobs might have existed in the absence of the stimulus package, with employees working on the same activities or other activities. The reports filed by recipients measure only the jobs created by employers who received ARRA funding directly or by their immediate subcontractors (so-called primary and secondary recipients), not by lower-level subcontractors.

The reports do not attempt to measure the number of jobs that may have been created or retained indirectly as greater income for recipients and their employees boosted demand for products and services.

The recipients’ reports cover only certain appropriations made in ARRA, which encompass about one-fifth of the total amount spent by the government or conveyed through tax reductions in ARRA during the fourth quarter; the reports do not measure the effects of other provisions of the stimulus package, such as tax cuts and transfer payments (including unemployment insurance payments) to individuals.

Consequently, estimating the law’s overall effects on employment requires a more comprehensive analysis than the recipients’ reports provide.

[Henry]

In other words, no one really knows.

Shocking.

[ljs]

In other words, no one really knows.

Shocking.

exactly...and add me to the list of "lost their job".

[ABQCOWBOY]

It would be interesting to see how these projections compare with years past.

[The Brave Little Toaster Oven]

does this take into effect the people who took lesser jobs than what they were qualified for?

[McD5]

*cough cough* Sure it did.

[Burgold]

does this take into effect the people who took lesser jobs than what they were qualified for?

I doubt it. The math and interviewing process would be too compled. Besides, some people have taken "lesser jobs" not because of the economy, but because the "lesser job" made them happier. I know that I did that to a degree when I chose to freelance with NPR... luckily, I can suppliment the income in other ways, but the pay is not great.

Generally, this is good news. Not good enough, but good.

I still hate the concept of a "saved" job. It's pure con artistry. A created job you can quantify... a "saved job" how can you be sure one way or the other if it would have been lost.

[Ned Flanders]

*cough cough* Sure it did.

Gas station and 7-Eleven clerks are cyclical, so I totally believe the numbers being given out......

[Duckus]

I would have thought that it is pretty impossible to calculate the numbers - which is exactly what the second article states. They figure it has created a million jobs or more - but they don't really know for sure because they don't know what would have happened with out the ARRA - which makes perfect sense.

Pretty interesting.

Hilarious how many people on this board "know" exactly the effects of the ARRA (positive or negative) on our economy when leading experts say it impossible to gauge at this time/with our info.

[JMS]

In other words, no one really knows.

Shocking.

:shot:

We know for a fact that more than one hundred thousand teachers, policemen, and firefighters would have lost their jobs without the stimulus bill.

We know for a fact that the problem with the economy is the private sector can't get financing and thus can't invest or grow the economy.

If the government doesn't spend, the economy will shrink... Which is much worse than running a short term budget deficite.

[mardi gras skin]

That comes to about $400,000 a job, right? Sign me up!

[Renegade7]

:shot:

We know for a fact that more than one hundred thousand teachers, policemen, and firefighters would have lost their jobs without the stimulus bill.

We know for a fact that the problem with the economy is the private sector can't get financing and thus can't invest or grow the economy.

If the government doesn't spend, the economy will shrink... Which is much worse than running a short term budget deficite.

Exactly. It may not have saved as many private sector jobs as some would of liked, but it definetly did it's job for state and local goverments and prevented another depression. We got lucky, but this should still be a victory for Obama. History will be the judge of that, I guess.

[Henry]

:shot:

We know for a fact that more than one hundred thousand teachers, policemen, and firefighters would have lost their jobs without the stimulus bill.

We know for a fact that the problem with the economy is the private sector can't get financing and thus can't invest or grow the economy.

If the government doesn't spend, the economy will shrink... Which is much worse than running a short term budget deficite.

Hey, I'm a Keyensian, but I don't think it's a stretch to say that this is not an exact science.

[techboy]

Hey, I'm a Keyensian, but I don't think it's a stretch to say that this is not an exact science.

Hayek 4 lyfe!!!

[twa]

:shot:

We know for a fact that more than one hundred thousand teachers, policemen, and firefighters would have lost their jobs without the stimulus bill.

We know for a fact that the problem with the economy is the private sector can't get financing and thus can't invest or grow the economy.

If the government doesn't spend, the economy will shrink... Which is much worse than running a short term budget deficite.

We know for a fact we borrowed money to keep them employed

We know for a fact it will cost more than we borrowed

We(businesses) know for a fact who who be paying down the deficit

We know for a fact we're ****ed if we continue to expand public payrolls

Spending w/o increasing GDP is unsustainable

But that's OK,we can cut the fat(excess employees)

Maybe they can get a govt job.

added

You better fire up the printing presses and leverage China to SAVE them jobs again

Rockefeller Institute: States Reported Fifth Consecutive Drop in Tax Collections in the Fourth Quarter of 2009

http://www.calculatedriskblog.com/2010/02/report-state-tax-revenues-decline-in-q4.html

Better throw in some more for the expanded entitlements they mandated while ya are at it.

[Smoot Point Really]

It's interesting the use of the term FTE... Basically, fewer people could've worked more OT.

[Tulane Skins Fan]

Its definitely not an exact science, its definitely true that a lot of people did not benefit from the stimulus and lost their jobs, BUT it seems true that the economy would have been a lot worse off without the stimulus and that the stimulus did actually help in both reviving the economy and create jobs. I know that burns a whole in half of the tailgate, but deal with it.

[Popeman38]

Honest question, not trying to poke a hornets nest. Does this study define the line between what Bush pushed through and what Obama pushed through? I don't see how Bush can get labeled as causing this mess if he started the stimulus/bailout plans and Obama just continued them.

[Burgold]

Honest question, not trying to poke a hornets nest. Does this study define the line between what Bush pushed through and what Obama pushed through? I don't see how Bush can get labeled as causing this mess if he started the stimulus/bailout plans and Obama just continued them.

I think Bush deserves some credit for reacting to the crisis in the best way he thought he could (given the advice of advisors and experts). So, if the the Tarp and the Stim softened our landing or evened out our descent both Obama and Bush deserve credit.

However, Bush can get credit for "causing this mess" because for eight years either through neglect, bad decision making, or poor policing of policy we wound up in the situation we were in. Now, the mess is not all Bush's fault. It was at least 20 years in the making, but Bush and Congress certainly could have done a better job charting a course or correcting the course.

He really only acting after it became an emergency. People were talking about the housing bubble, deficits, and financial shenanigans for years.

[Thiebear]

I swore i read that the Countries in the world that did not "SPEND" their way out.

Actually came out faster than the countries that did attempt it.

There was no doubt we would eventually get through this... its just the timeing and the ramifications after the bailout.

Edit: found it:

The United States and Britain have by far and away run the largest deficits as a percentage of GDP (i.e. the most stimulus), yet the U.S. and Britain, along with Italy and Russia, had not bottomed out in second-quarter 2009, while the rest of the 10 largest economies were showing real growth in the second quarter. Russia's poor performance is largely a function of relying very heavily on the export of raw materials rather than developing a broad-based economy as all the others in the Big 10 have done.

The three countries with the smallest deficits (the least stimulus) — Brazil, China and Germany — have all turned the corner rather quickly and are growing. German Chancellor Angela Merkel has just announced she is going to push tax cuts, which should give the German economy an additional shot in the arm.

While the data set is too small with the top 10 countries (which collectively account for a large majority of the world's GDP) to draw definitive conclusions, the existing evidence indicates that a big stimulus package seems to delay recovery, while little stimulus leads to a quick return to economic growth.

http://www.cato.org/pub_display.php?pub_id=10615

[Ax]

Stimulus bill created up to 2.1 million jobs

...or, as little as 0.

Throw a dart, hit a number.

[ABQCOWBOY]

I swore i read that the Countries in the world that did not "SPEND" their way out.

Actually came out faster than the countries that did attempt it.

There was no doubt we would eventually get through this... its just the timeing and the ramifications after the bailout.

Edit: found it:

http://www.cato.org/pub_display.php?pub_id=10615

The Japanese tried this exact approach in the 90s. They tried to spend their way out. 9 Trillion Dollars later, they figured out that it didn't work. The Japanese call it the Lost Generation.

[#98QBKiller]

I lost my job in 2009 and ended up in a much better job a few months down the road.

[Chicken Fried]

:shot:

We know for a fact that more than one hundred thousand teachers, policemen, and firefighters would have lost their jobs without the stimulus bill.

We know for a fact that the problem with the economy is the private sector can't get financing and thus can't invest or grow the economy.

If the government doesn't spend, the economy will shrink... Which is much worse than running a short term budget deficite.

Do you realize why all of that is true? We have no money! Do you know why we have no money? Because our goveremt spends too much, Republicans and Democrats. Because of the stimulus' ridiculous size and extra unnecessary add-ons, we have only dug ourselves a deeper grave the next time this happens.