How's That Stimulus Working For You?

The Associated Press has a story this morning called “Unemployment challenges Obama’s economic narrative.” No kidding.

I never get tired reminding stimulus advocates that before the stimulus bill was passed, the president scared the bejesus out of many people by claiming that if the Stimulus bill wasn’t passed, unemployment would reach 8.8 percent. Also, his team promoted the idea that the stimulus would create 3.3 million jobs (not just saved). They even had numbers and a model to prove it.

So the president got his cash, $789 billion which grew to $862 billion, and unemployment kept going up. It even passed 10 percent at one point and is now stagnating at 9.7 percent–where it’s scheduled to stay for a while.

And it’s not the only “job bill” that was passed. There was one in March 2020 ($18 billion) and another one in April 2010.

By the president’s own logic, the stimulus failed. That’s why he has shifted his argument. Sure, the economy lost jobs, he now says, but without the stimulus it would have lost nearly 2 million more jobs. How you go about proving that this is not true is impossible and this is why it’s not powerful. It doesn’t make it right.

More interestingly, shocking, and sickening is the role that the Congressional Budget Office plays in this drama. How many times have you read that ” The nonpartisan Congressional Budget Office estimates that as of the end of 2009, last year’s $787 billion stimulus package had created 1.4 million to 3 million full-time-equivalent jobs that wouldn’t have existed otherwise.”

Never mind, by the way, that, as Heritage Foundation’s Brian Riedl noted a few weeks ago, CBO never even bothered to check how many jobs were “created or saved” in the post-stimulus economy. They just assumed that what they had predicted would happen, did actually happened.

“This is like a weather forecaster saying that the high yesterday was 65 degrees, because that is what had been predicted — even though it actually never topped 50 degrees.

Now, CBO director Doug Elmendorf has finally conceded that they never actual examined this stimulus bills’ affect on the economy. Responding to a questioner following a recent speech, he admitted that the CBO’s jobs count was “essentially repeating the same exercise” as their initial projections. When asked if this means their jobs projections would have ignored any failures of stimulus spending to perform as CBO predicted, Mr. Elmendorf responded “that’s right.” (Exchange begins at 38:20.)””

Watch it and send it around. It’s unbelievable.

If you want a true picture of the failures of the Obama stimulus bill think about the following. Not only is unemployment high and will stay this way for a while, but the people who are unemployed stay unemployed way longer than they used to. The chart below shows that no job bill or stimulus is changing that trend. In fact, it might be creating the trend.