You know that American Recovery Act (or Stimulus Package) that Republicans have excoriated since the day President Obama proposed it? According to the Congressional Budget Office, it worked. This crop of GOP presidential candidates never let actual facts get in the way of talking points, but nevertheless… here goes:
According to CBO, between 300,000 and 2 million people who were employed in December owed their jobs to the stimulus. The Recovery Act’s impact on jobs peaked in 2010′s third quarter, when an estimated 3.6 million people were employed in jobs that were either saved or created by the Recovery Act. CBO also found that the stimulus:
-Raised real (inflation-adjusted) gross domestic product (GDP) by between 0.2 percent and 1.5 percent.
– Lowered the unemployment rate by between 0.2 percentage points and 1.1 percentage points.
– Increased the number of people employed by between 0.3 million and 2.0 million.
– Increased the number of full-time-equivalent jobs by 0.4 million to 2.6 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.)
It's not just the CBO. Other economists overwhelmingly agree as well. The University of Chicago's Booth School of business polled 40 of the top economists in the country about the effect of the stimulus. 80% of them agreed with the statement that unemployment was lower in 2010 than it would have been without the stimulus bill.
What might have happened if the US had gone the austerity route – the very same strategy being pushed by Romney, Santorum, Paul, Mo Brooks, & every TEA Partier still sipping from their cups of poisoned rhetoric and invented “facts?”
…as luck would have it, the global economy has supplied us with two experiments, one testing each theory. The European Union embraced the austerity of Hayek and the anti-Keynesians: It is plunging into a renewed recession. Here in the United States, where President Obama supported a modest stimulus bill, auto bailouts, and some financial reregulation, the renewed auto sector is roaring back to life, and the unemployment rate is dropping at a nice clip. In the auto sector, government helped clean up the balance sheet, renegotiate pension and work rules, restructure wage scales, and build the best product possible.
Detroit is bouncing back, with profits and new models streaming off assembly lines. Europe is facing an austere summer and fall, with little to show for its ideological purity except continued red ink.
With the economic argument failing, the Republican Party is searching for another argument. Hence the rise of Santorum.
The GOP is left with nothing whatsoever to say about fixing the economy except nonsense statements like the ones from Wednesday night's debate. When asked point blank “How would you cut the deficit?” candidates were long on fallacy & short on facts:
While Mitt Romney danced around the question by telling people that he would turn the programs into block grants and hand them back to the states, Rick Santorum was honest. He promised that he would go after Social Security, Medicare, Medicaid, and Food Stamps. Santorum also promised that he would not cut military spending.
We really must keep this primary season rolling as long as possible. Feckless GOP primary voters are working together to make President Obama the luckiest man in America.