For Republicans, Stimulus Reality Bites
Back in January, a CNN poll revealed that "nearly three out of four Americans think that at least half of the money spent in the federal stimulus plan has been wasted." But one year after the $787 billion American Recovery and Reinvestment Act (ARRA) was signed into law, the numbers - and the overwhelming consensus of economists - tell the tale of its success. And as it turns out, that consensus is shared by dozens of Republican Congressmen whose money was where there mouths weren't.
To be sure, Americans have been bombarded for months by Republican propaganda declaring the recovery package "a failure." But as ThinkProgress documented Wednesday, at least 111 GOP Congressman, including leaders John Boehner (R-OH) and Eric Cantor (R-VA) took credit for stimulus-funded projects they voted against. That followed reports from the reliably Republican Wall Street Journal and Washington Times which detailed many of the GOP's fiercest stimulus foes praising the "much needed jobs" in created and "training workers for energy-efficiency projects."
Nevertheless, National Republican Senatorial Committee chairman John Cornyn (R-TX), tweeted:
Myth: no contradiction to vote against reckless stimulus but if maj hellbent to spend the money anyway, make sure Texas gets fair share.
Of course, the hypocrisy is double. Republicans, all of whom in the House and all but three in the Senate voted against the stimulus bill, clamored for cash to fund projects they opposed. And much more important, their private language about "stimulative effects" and "creating jobs" showed that despite their public demagoguery they believed then as now that the stimulus as public policy worked.
And David Leonhardt charted in the New York Times, it surely did. The data and the economists who trust it don't lie.
"Imagine," Leonhardt asked, "if one year ago, Congress had passed a stimulus bill that really worked...what would the economy look like today?" His answer:
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.
Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody's Economy.com. They 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. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.
That summary followed USA Today's quarterly survey of 50 economists in January which produced a median estimate that the ARRA prevented unemployment from reaching 10.8%, saving 1.2 million jobs as a result. And to be sure, President Obama's stimulus helped precisely where it was needed most - rescuing devastated state budgets.
As David Leonhardt's charts in the New York Times show, the impact of the stimulus on economic growth has been dramatic. And that boost to GDP has been lauded from left and right alike.
For the three month period which ended in June, the Economic Policy Institute announced the Obama stimulus measures overall added "up to 3 full percentage points of annualized growth in the quarter." For its part, the Wall Street Journal in September agreed with that assessment:
Many forecasters say stimulus spending is adding two to three percentage points to economic growth in the second and third quarters, when measured at an annual rate. The impact in the second quarter, calculated by analyzing how the extra funds flowing into the economy boost consumption, investment and spending, helped slow the rate of decline and will lay the groundwork for positive growth in the third quarter -- something that seemed almost implausible just a few months ago. Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus.
In January, the USA Today panel of economists concurred. But as it turned out, their consensus estimate of 4.5% GDP growth in the fourth quarter of 2009 was low. Just days later came the news that Q4 GDP grew at a blistering 5.7% pace.
Importantly, as ProPublica documented in its recovery tracking project, only a fraction of the stimulus pot has been spent to date. As of January 25, 2010, only $172 billion of the program budget had spent so far with another $157 billion in process, leaving $251 billion in remaining funding. Meanwhile, by ProPublica's accounting, $93 billion in ARRA tax cuts have been paid out, with another $119 billion still to come.
While reality, as Stephen Colbert once put it, "has a well-known liberal bias," perception as ABC's Jake Tapper noted nevertheless remains the Republicans' best friend.
Judging from CNN's polling, the Obama administration's message regarding the impact of the stimulus isn't getting through to the American people. CNN's respondents have clearly taken it to heart as part of that network's "Stimulus Project."
Twenty-one percent of people questioned in the poll say nearly all the money in the stimulus has been wasted, with 24 percent feeling that most money has been wasted and an additional 29 percent saying that about half has been wasted. Twenty-one percent say only a little has been wasted and 4 percent think that no stimulus dollars have been wasted.
"One reason why the economic stimulus bill is no longer popular with the American public is the perception that a lot of the money has been wasted. Six in 10 believe that the projects in the stimulus bill were included for purely political reasons," said CNN Polling Director Keating Holland.
As a dumbfounded Joe Klein of Time concluded, "nearly three out of four Americans think the money has been wasted. On second thought, they may be right: it's been wasted on them":
Indeed, the largest single item in the package--$288 billion--is tax relief for 95% of the American public. This money is that magical $60 to $80 per month you've been finding in your paycheck since last spring. Not a life changing amount, but helpful in paying the bills.
The next highest amount was $275 billion in grants and loans to states. This is why your child's teacher wasn't laid off...and why the fire station has remained open, and why you're not paying even higher state and local taxes to close the local budget hole.
Republicans, despite their public statements to the contrary, couldn't agree more. While the grandstanding new Senator Scott Brown is lying to his new constituents in Massachusetts that the "stimulus bill didn't create one new job," Minnesota Governor Tim Pawlenty is turning to stimulus funds from President Obama to fill one-third of his state's billion dollar budget gap. That would be the same stimulus funding he once declared "misdirected", "largely wasted" and "ludicrous."
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Apparently it has to look good in a bikini, slam-dunk a round-ball, or dance with the stars. Hitting home-runs and telling the truth just don't sell well in America anymore. Sigh.
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