Grading The Stimulus Package

It's been a year since the passage of the American Reinvestment and Recovery Act of 2009 - better known as the stimulus package - was passed. 

On one side of the political aisle, the Obama administration and Democrats have declared it a huge success that reversed a failing economy and created or saved millions of jobs. 

Republicans have responded saying the stimulus package didn't create a single job, damaged the economy and was a massive waste of money.   

The reality, of course, is somewhere between these politically driven extremes. 

The New York Times article Judging Stimulus by Jobs Data Reveals Success points out that non-partisan economists and the politically neutral Congressional Budget Office believe the package has created or saved 1.6 to 1.8 million jobs so far with 2.5 million expected by the time the program ends.  USA Today's most recent survey of economists echos this view.

Mainstream economists also credit the stimulus package with helping to stabilize the economy and adding as much 2% points to last year's GDP.  Adding to the belief that the stimulus package had an impact is many economists are concerned that the economy may slow when the stimulus spending runs out.  

There are also lots of examples of people who have gotten jobs and businesses who have benefited from the package.  This CNN article is one of hundreds of Google-able stories about people who got jobs because of the stimulus package. 

Based on the breadth and depth of this quantitative and qualitative data, it is clear the stimulus package had a positive impact on the economy in 2009, and likely will again in 2010. 

But just as declaring the package had no impact is a mistake, so is declaring it a success.  Over half the legislated spending has yet to hit the economy.  Most of the goals have not been achieved, and the cost of the package in terms of additional national debt is high. 

So for now we are giving the stimulus package an incomplete. 

Over the coming months we will post in more detail on the impact of the package on small business, and on the rest of the package spend.  Hopefully, after the majority of the money is spent we will be able to give the package a final grade.   

Comments

[Servicedesk werk]

Is the stimulus a success? Unsure, we have never seen the government stimulate an economy as much as they do now. What about valuation of the Dollar?

[Boom Trucks]

It's nice to see news about the construction funding and stimulus package that is ACTUALLY balanced. There's some real journalism.

[Eric]

The stimulus is clearly a success; how much of a success remains to be seen.