The GOP and the Stimulus Bust
A Republican staffer put it this way:
In other words: they were wrong. ... It will be interesting to see how the new report "saves or creates" the same amount (3.5 to 4 million) of jobs by the end of 2010 that they promised at the bill signing-even though the country has lost more than 1 million jobs since then, the unemployment rate is well above the assumptions used for the earlier projection, and the fact that Dr. Romer, Dr. Summers and others believe that we'll continue to have job LOSSES through the end of the year.
And even the MSM recognizes that the promised jobs cannot be verified. ABC News observed on Monday:
The White House Council of Economic Advisers issued a report today predicting that the stimulus package will save or create 1.5 million jobs by the end of this year. That's in line with previous White House estimates. But there's a big caveat: Because there is no uniform, reliable reporting formula for states and agencies to use to calculate real jobs saved and created, there is no way to fact-check the projections. Rather than measuring actual jobs created, the CEA estimate is based on a formula widely used by economists: that a 1 percent increase in GDP equates to approximately 1 million jobs. The council also makes the assumption that GDP will grow, due to an increase in government purchases, and tax decreases that have only just taken effect. It is, the report concedes, "an imperfect" measurement. ... The administration continues to defend its initial assessment that the Recovery Act will ultimately create or save 3.5 million jobs. But the new report includes the caveat that the bulk of that increase will be seen at the end of 2010.
So, the bottom line: we have spent a trillion dollars (including interest) largely on nothing. We aren't getting jobs -- at least none that we can verify. We aren't getting infrastructure. But we did get a mound of debt.
While lacking any significant economic punch, the stimulus may, however, have a substantial political impact. It was in large part the motivation for the tea party protests. It has allowed Republicans to differentiate themselves from the Obama spending plans. And it has heightened the concern of so-called Blue Dog Democrats who may now be nervous about running up even more debt which would be generated by the remainder of the Obama agenda.
The stimulus was a missed opportunity -- a chance to finance needed defense spending, provide badly needed infrastructure, and provide tax assistance to employers to maintain and increase hiring. But Republicans may now see it as a juicy political opening. They can rightly claim they opposed the boondoggle spending, which has done nothing but increase our fiscal woes. And in that respect it may be a critical component in Republicans' political comeback. In sum, sometimes saying "no" is exactly the right thing to do.