Know the Facts: The Success of the Stimulus Package

There’s some question/debate about whether the stimulus package that was passed earlier this year has helped the economy or not.

To be sure: there are many structural problems in our economy – such as foreign outsourcing, computerization, uncompetitiveness in manufacturing – that won’t just go away. No bill from Congress will fix all of that, or any of that.

But make no mistake, the stimulus package has helped the economy. As mentioned in the article Stimulus Credited for Lifting Economy, But Worries About Unemployment Persist from the Washington Post,

Half a year after Congress enacted the largest economic stimulus plan in the nation’s history, the measure is contributing to what increasingly looks like a budding recovery…

While some congressional Republicans and others are dubious about the success of the stimulus plan, economists generally agree that the package has played a significant part in stabilizing the economy. They are less certain about the size of the impact.

“It’s starting to play a role, helping us to have slightly positive rather than slightly negative GDP growth,” said Phillip Swagel, an assistant Treasury secretary in the Bush administration who is now a visiting professor at Georgetown’s McDonough School of Business. “It’s a gigantic amount of fiscal stimulus, and anyone who tells you it has had no impact, you should be skeptical of.”

IHS Global Insight, an economic consulting firm, estimates that the stimulus has increased the 2009 gross domestic product by about 1 percent over what it otherwise would have been, with the benefit almost entirely in the second half of the year.

The firm also forecasts that the package will, in total, result in about 2 million more jobs than otherwise would have existed at the end of 2010. Moody’s Economy.com estimates that the initiative will increase employment by 2.5 million jobs. Both estimates are below the 3 million to 3.5 million jobs the Obama administration estimated the package would create or save because the firms assumed more modest ripple effects from the stimulus spending than administration economists did.

Still, Mark Zandi, chief economist of Moody’s Economy.com, said, “I don’t think it’s any accident that the economy has gone out of recession and into recovery at the same time stimulus is providing its maximum economic impact.”

Now that YOU know, share the knowledge, and let everyone else know.
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An interesting video, Five Ways President Obama Changed My Life, talks about how the stimulus and other policies have helped a Jane Q Citizen from Philly:

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