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July 02, 2011 8:05 AM The difference between growth and contraction

By Steve Benen

Ordinarily, when the White House issues a report on a Friday afternoon before a holiday weekend, it’s news administration officials are eager to bury. If they wanted people to see it, officials would pick a better time to release it.

But yesterday, the Obama White House released this report (pdf), which isn’t embarrassing in the slightest. In fact, I’m a little surprised the West Wing didn’t make more of an effort to promote news like this.

A White House report released Friday said the 2009 stimulus bill raised GDP by as much as 3.2 percent in the first quarter of 2011.

The report from the White House Council of Economic Advisers said the stimulus added 2.3 to 3.2 percent to gross domestic product in the first quarter relative to what it otherwise would have been.

The stimulus package also increased employment relative to what it otherwise would have been by between 2.4 and 3.6 million jobs, the report said.

Reading the report, there’s no apparent effort to fudge the data or exaggerate the results. It’s simply a summary of what the Recovery Act did and the extent to which it worked.

And “worked” is the key word here. Economic growth in the first quarter of 2011 (January through March) was quite meager at 1.9%. But the key point to keep in mind here is that without the stimulus, economic growth wouldn’t have existed at all, and the economy would have contracted.

In all, there are as many as 3.6 million Americans with jobs today who wouldn’t have otherwise had them were it not for Democratic stimulus effort.

Republicans began insisting that the stimulus “failed” in early April 2009, when the initiative was barely underway. They’ve repeated the bogus claim every day since, hoping that dishonest repetition would shape the debate and skew public attitudes. To a very real extent, the propaganda campaign has been a success: most of the country believes the Recovery Act didn’t work, which in turn has undermined the very idea of public investment as a means towards economic growth.

Reality, however, points in a very different direction.

The stimulus should have been bigger and more ambitious, and deserved more than one round of investment. But the fact remains that the derided Recovery Act turned the economy around. An economy that was shrinking started growing, and an economy that was hemorrhaging jobs started adding jobs, because of this one piece of legislation. Republicans, reporters, and even the American mainstream may find these facts inconvenient, but the truth is stubborn.

Facing the greatest economic crisis in generations, the nation was effectively left with two choices early 2009: the Democratic stimulus or the Republicans’ proposed five-year spending freeze. We’re all very fortunate the latter was in the minority.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • DK on July 02, 2011 8:09 AM:

    Oh Steve!

    Don't you know that all evidence is made by and for liberals?

  • c u n d gulag on July 02, 2011 8:20 AM:

    Love him or hate him, I think most of us would agree that no matter how great a law student he was, or how wonderful a legal scholar he was, or even how magnificent a speaker he is, when push comes to shove - Obama is one shitty advocate.

    He's a lousy advocate for Liberalism.

    Maybe it's because he's not a Liberal.

    But, he's even a lousy advocate for his own policies and ideas.

    Things that should be trumpeted, get muffled. And this is a perfect example.

    Jesus H. Christ on a blind three-legged incontinent donkey, if you want to make a case for MORE stimulus money, for God's sake, trumpet the success of the prior stimulus, and don't release it on a holiday weekend.

    Republicans say 'failed stimulus' as if it's "Hello!"

    The least YOU could do is hold these numbers up at call the Republicans on their lies.

    In the words of the great Yosemite Sam:
    Rassa, massa, frassa... Idjit President...

  • Danp on July 02, 2011 8:39 AM:

    In all, there are as many as 3.6 million Americans with jobs today who wouldn’t have otherwise had them were it not for Democratic stimulus effort

    I have to quibble with the term >Democratic stimulus. Like TARP, the Republicans knew they had to let something pass, or they would have been held responsible for whatever happened to the economy after that. So, even though only one or two Republicans voted for it, those last 3-4 sabateurs needed to pass the ARRA had 90% of the say in the argument. It would have been interesting to see how much the AMT fix had to do improving the economy, or how much could have been done if all those who voted for it actually wanted to improve the economy.

  • FRP on July 02, 2011 8:45 AM:

    It appears the ire of Mr Benen has been trifled with here . Compared to other more readily available ire's the present iteration does seem to founder less on fantastic scheming and directly towards the issue of the rising fantasy , based in the bowels of resentment and dissembled history .

  • Goldilocks on July 02, 2011 8:52 AM:

    If there's one amendment to the Constitution that should be on the table it's one that would outlaw the knowing and willful propagation of bogus claims, fabricated information and outright lies for the purpose of deceiving the public in order to further partisan political gain.

  • Anonymous on July 02, 2011 9:41 AM:

    I believe there are just those sorts of laws on the books . From the Hatch amendment , and forbidding of campaign money and tax money sweet mingly affection.

  • FRP on July 02, 2011 9:46 AM:

    I believe there are just those sorts of laws on the books . From the Hatch amendment , and forbidding of campaign money and tax money sweet mingly affection.

    C'est moi

    at the expense of indulging the noodling Captcha , c'est moi

  • zeitgeist on July 02, 2011 12:21 PM:

    this is a direct refutation of Romney's "Obama's Not Working" ads. Romney is paying for them to run in Pennsylvania, and putting them on the web.

    Is the DNC or Obama 2012 paying to get this refutation out?

  • Chris on July 02, 2011 6:09 PM:

    This report confirms what we already knew--that the stimulus increased economic growth and created jobs.

    Guess what the stimulus accomplished? It reduced the deficit. Undoubtedly with economic contraction and more unemployed, revenues would have fallen further and deficits would have been higher.

    It would be nice if somebody out there would inform the American people.

  • bdop4 on July 03, 2011 2:19 AM:

    Dems are going to have to re-litigate the financial meltdown and remind voters what the republicans had proposed as a solution: tax cuts and across-the-board spending freezes. Someone needs substitute their "solution" and describe how fast unemployment and homelessness would have accelerated in the intervening years.

    There is no doubt in my mind that unemployment would have exceeded 20% if President McCain had occupied the oval office.

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