"Judging Stimulus by Job Data Reveals Success" Blog #3

One year ago, Congress passed a stimulus bill.

And then we all lived happily ever after.

Ok, we might not have lived happily ever after, but we might have overlooked some of the successes of Congress's stimulus bill. Although the unemployment rate remains around 10 percent, this bill employed around two million people. IHS Global Insight, Macroeconomic Advisers and Moody's Economy.com "all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs." Other successes of the bill have been overlooked due to their slow process, like state aid to build roads and buildings, and the aid to unemployment benefits and tax provisions has gone unnoticed.

Congress is now debating a new "jobs bill" because the previous bill saved jobs but did not create any new ones. However, David Leonhardt argues that harsh critics of the bill are misguided. "This is the money that has kept teachers, police officers, health care workers and firefighters employed." Consumer spending has also risen since February, and "the billions of dollars in in tax cuts, food stamps, and jobless benefits, in the stimulus have still made a difference."

Another fact supporting the bill's success in the history of financial crises. Usually the unemployment rate will drop for five years before beginning to rise again. While because of the stimulus plan the jobless rate is "expected to begin falling consistently by the end of this year."

"It prevented things from getting much worse that they otherwise would have been," Nariman Behravesh, Global Insight's chief economist, says. "I think everyone would have to acknowledge that's a good thing."