CBO: Recovery Act Has Created Up To 2.8 Million Jobs

May 26, 2010 10:20 am ET — Matt Finkelstein

It was almost a year ago now that Republican leaders prematurely declared that the American Recovery and Reinvestment Act "did not stimulate the economy."  Since then, the party has steadfastly argued that the recovery effort not only "failed," but actually worsened the recession, even as evidence to the contrary piled up all around them. 

In January, the nonpartisan Congressional Budget Office estimated that the Recovery Act had created up to 2.4 million jobs

In February, leading economic research firms agreed that the Recovery Act was responsible for job growth.         

In April, the private sector added more jobs -- 231,000 -- than any month since March 2006. 

And now, there's more evidence that the Recovery Act is working.  Yesterday, the CBO issued a report estimating that the economic recovery program has created up to 2.8 million jobs and increased GDP by up to 4.2 percent.  From the CBO Director's Blog:

CBO estimates that in the first quarter of calendar year 2010, ARRA's policies:

  • Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.2 percent,
  • Lowered the unemployment rate by between 0.7 percentage points and 1.5 percentage points,
  • Increased the number of people employed by between 1.2 million and 2.8 million

But don't expect Republican lawmakers, who have been seemingly rooting for failure, to admit they were wrong.  Instead, they'll likely cling to the still-too-high unemployment rate to support their partisan rhetoric.  However, the CBO makes it clear that unemployment would be even higher without the stimulus spending, and the severity of the downturn only proves how crucial the Recovery Act, which passed in the face of unified Republican opposition, really was.   

Job totals per month since December 2007.

[Job totals per month since December 2007, The Gavel, 5/7/10]

GDP per quarter

[GDP per quarter, The Gavel, 4/30/10]

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