Three years ago today, President Obama signed the American Recovery and Reinvestment Act. Though, at the time, everyone agreed that the economy was in serious trouble, three years on, the law -- better known as the stimulus -- has become incredibly controversial. President Obama's political opponents insist that the stimulus did nothing to help the economy and some even claim that it made things worse. The numbers, and a newly released video, tell a very different story.
In the years before the start of the Great Recession, the US economy was growing, albeit at a much slower pace than it had during the 1990s, and the country was adding jobs at a respectable clip. But that growth was built on a housing bubble and dependent on a deeply rotten financial system. When the bubble popped, and the financial system almost collapsed, the economy took a nosedive.
Take overall gross domestic product, for example. That's the total measure of all economic activity in the country. In the first half of 2008, GDP stagnated, and then in the second half, it began to contract at an alarming rate. In the 4th quarter of 2008, GDP declined by an astounding 9 percent. As the economy shrank, companies began laying off more and more people, and we began losing jobs left and right. By the time President Obama took office, the economy was in a free-fall. In January 2009, the country lost more jobs in a single month than it had in any month in the previous 60 years.
Then, in February, we enacted the stimulus bill. It was designed to stop the bleeding and turn the economy around by pumping billions of dollars into the economy through things like infrastructure investments, aid to the states, and tax breaks. So what happened after the stimulus started? Did the economy continue its disastrous tumble?
In the second quarter of 2009, the first full quarter after the stimulus passed, the economy did still contract, but at only a 0.7 percent rate, and then began to grow again in the third quarter. Job losses also began to slow down immediately. Before the stimulus, we were losing more and more jobs each month. After the stimulus: fewer and fewer, until eventually we started adding jobs again. Private-sector layoffs actually peaked in the month the stimulus started, and then declined dramatically.
In early 2009, every indication was that the economy was headed over the edge of a cliff. But at the last second, the country swerved away from the edge and started heading back in the right direction.
Now maybe it was just pure coincidence that the turnaround began at almost the exact same moment that the stimulus started. It could be possible that that the economy began to grow again, job losses began to slow and layoffs started coming back down to earth all at nearly the same time -- right after the president signed the Recovery Act -- and it had nothing at all to do with the stimulus.
More likely, of course, is that the myriad independent economists -- from the Congressional Budget Office to Moody's.com to Macro Economic Advisors -- are right.
The stimulus worked.
- kept the money here
- forced the infrastructure projects to work around the clock
- did more infrastructure projects and less payroll tax deduction.
If you really want to get people working, then they should have kept the projects working around the clock. Companies would have had to hire 2 or 3 times the number of people to get these projects done.
We have observed 10 quarters of positive GDP growth following 6 quarters of stagnant or declining GDP. We have observed the creation of 3 million jobs following the loss of 8 million jobs. We have observed the stock market rebound by 70%. We have seen a small increase of public investment and lagging private investment. In short three years ago the economy was collapsing today it is not.
Despite the marginally better headline numbers the economy is in deep trouble. The Federal debt had been increasing at a rate of $500 billion per year prior to the recession and since has increased by $1,200 billion per year. As was noted prior to the recession growth was fueled by runaway consumer debt. Thus we have an economy kept afloat by borrowing 8% of its overall GDP. The stimulus did nothing to resolve this. Neither political Party has offered anything to resolve this. The economy has cancer and the Democrats prescribe band aids and aspirin while the Republicans prescribe more cigarettes.
Until we face the facts that tax cuts using borrowed monies is suicide, military spending to support an Empire is bankrupting us, “free trade” is consuming us and Wall Street is looting the economy we will continue to sink into the dustbin of history.
Unemployment up
Underemployed at all time high
Millions so discouraged they are dropping out of the workforce
Lowest number of people in the workforce in a generation
Gas prices up dramatically
Other commodity prices up sharply (eg, milk)
Deficits up the most of any president from Washington to Bush combined
Despite the "turnaround" cited and credited to the stimulus, these regular guy statistics are not projected, by the Obama admin itself, to get much better in his second term.
The stimulus' report card on these in Obama's first term -- F.
Based on jsmit thinking, it is only when the Republican tanks the economy that a President is allowed an A.
What we do know is we are $4T more in debt under Obama and all the economic metrics I cited are WORSE and at the present rate will not exceed the average under Bush until way after Obama's (heaven forbid) second term and that is according to his own projections.
Failure is a reason to pick someone different, really anyone.
If the debt doesn't matter, then why not print every person a cool million, and save the economy tomorrow?
If the debt does matter, then how can adding to it help the economy, when history has shown that it's never paid down?
We need more choice.
This president is a failure. His challengers have not failed...yet.
I read that in at least eight recessions since WWII, that stimulus spending helped us recover from recession. In a brief look, I have also noticed that some recessions immediately following a tightening of government spending, such as in 1937, 1945 and 1969, suggesting that the inverse of stimulus spending helping recover from recession is also highly likely to be true.
The evidence seems fairly clear that stimulus spending can and does help an economy recover from recession. The evidence also seems fairly clear that fiscal tightening can lead to recession if the economy isn't cruising along already.
But the right-wing likes to deny evidence. Sort of like evolution or man-made climate change. While neither of these is proven true with 100% certainty, both have enough evidence to suggest that they are at least 90% likely true in the case of man-made climate change and well over 95% likely to be true in the case of evolution.
http://rodgermmitchell.wordpress.com/2012/01/04/myths-about-debtgdp-and-deficitgdp-while-being-24-and-believing-those-myths/
where "When Deficit/GDP falls, we eventually reach a recession, at which time Deficit/GDP rises and we come out of the recession." Deficit means per year and debt is cumulative.
Today, many Republicans and Conservatives have no civility, they are chaffed, charred, and condescending. They hoped the American economy failed, they cheered when the announcement that Brazil would host the Olympic game and not an American city, and they wanted an American industry (car makers, auto part makers, battery makers, Tire companies, auto glass makers, auto glass repair shops, Car rims makers, auto detailers, auto care product makers) to collaspe if not go out of business just so that could claim the President didn't care about an American industry or the American way. Instead the President stood for the American industry and they've railed against him. The President invested in alternative power sources, American engineering to compete against China advances in the area, and the Republicans/Conservative cried foul, then laughed and cheer when we stumbled. But that's ok, it will take a little time but American's will engineer a successful program.
The reason there are no shovel-ready jobs is that there are no longer jobs that require a legion of men with shovels.
So if your state didn't do so well, this time, it's not Obama's fault.
Because, as we all know, the right was wrong on the stimulus.
And, if W had provided President Obama with valid numbers as to how bad the slump was, the stimulus would have been larger and even more effective.
So, the best conclusion is - Obama 2012!
A graph of Obama's rise in the polls during the summer of 2008 with the stock market looks like this ...........X.
By the fourth quarter of 2008 it was increasingly clear Obama would win and with Nancy Pelosi and Democrats in control of BOTH HOuses of COngress businesses prepared for:
"redistribute the wealth"
by
"taxing the rich"
and
"those who oppose my energy policies will go bankrupt"
and
"utility costs will skyrocket"
Add in Obama ON THE RECORD telling his AFL-CIO union buddies in 2005 he favors a single payer health care system and Obama's inexperience as a junior Senator with THE most liberal voting record in the Senate despite over 100 present votes and businesses began boarding up the windows to hunker down for a four year "FAIRNESS" storm.
Businesses still held out hope McCain would win as it was not until AFTER the election in November that unemployment spiked to the 750,000 per month liberals blame on Bush.
The top 20%, who are the top 20% because they have their ear to the rail and are not run over by events, saw this train wreck coming and got out of the way.
AND RIGHTLY SO....1/2009, JOB LOSSES REACHED 750,000....NOT ONE OF OBAMA'S POLICIES WERE IN EFFECT...THANKS GEORGE.
DO honestly believe CEO's the world over walked into their boardrooms on Jan 21, 2009 and said, 'OK Obama is being sworn in today, what do we do now?"
Or where businesses listening to what Obama said on the campaign trail, and "HEDGED THEIR BETS" that if Obama wins the economy would nose dive??
A graph of Obama's rise in the polls with the stock market over the summer of 2008 looks like this................. X as companies scaled back in anticipation Obama would likely win.
The last step to "HEDGE THEIR BETS" was to finally let people go AFTER Obama won, these people are the top 10% becasue they have their ear to the rail and don't run over by events.
Obama spent months working on printing HUNDREDS of BILLIONS to pay for stimulus that has done NOTHING for the economy. The stock market bottomed at 6,500 in March 2009 when Obama finally passed the stimulus.......... coincidence???
Those same top 10% are now betting the economy will improve next year when a Republican is elected and are gearing up for the coming economic boom once Obama and his socialist minions are the ones who are unemployed.