Rep. Akin: Just Plain Wrong On Stimulus, Job Creation

May 13, 2010 1:39 pm ET

Rep. Todd Akin (R-MO) took to the House floor on Wednesday night to argue that the Democratic Party and President Obama are turning the current recession into another Great Depression. Akin claimed that the Recovery Act has failed, that any and all good news about the economy is part of a bubble created by the Federal Reserve and that Democratic legislation to address climate change will tax anyone who touches a light switch. The facts show that the Missouri Republican is wrong on all three counts.

Rep. Akin Claimed That The Stimulus Bill Has Failed

REP. TODD AKIN: Our actual unemployment has gone up like a skyrocket. And why is that? Well it's because, the - obviously, the stimulus bill didn't work. Now, should we have known it wouldn't work? Of course we should have known it. We could have gone back to the days of FDR, who also had a recession that he turned into a Great Depression because he used a wrong economic theory. [Akin Floor Speech, 5/12/10]

Statistics Show The Recovery Act Is Working

One Year After The Recovery Act, America Is On The Road To Recovery. Below is a graph prepared by the Speaker's office showing job gains/losses per month:

[Office of the Speaker, 5/7/10]

New York Times: April Jobs Numbers Show "The Largest Gain In Four Years." According to the New York Times: "The Labor Department's monthly snapshot of the job market, released on Friday, showed that employers added 290,000 jobs in April - the largest gain in four years - and that they did so across a broad swath of industries. The United States has now added jobs for four consecutive months." [New York Times, 5/7/10]

AP: "The Nation's Economy Posted Its Largest Job Gain In Three Years In March." According to the Associated Press: "The nation's economy posted its largest job gain in three years in March, while the unemployment rate remained at 9.7 percent for the third straight month. The increase is the latest sign that the economic recovery is sustainable and healing in the job market is beginning." [Associated Press4/2/10]

CBO: The American Recovery And Reinvestment Act Has Created Up To 2.4 Million American Jobs. According to CNN: "The Congressional Budget Office attributes between 800,000 to 2.4 million jobs and 1.2 to 3.1 percentage points of economic growth to stimulus." [CNN, 1/13/10]

The Bureau Of Labor Statistics Underestimated Job Growth In February And March

The Economy Created 53,000 More Jobs In February Than Originally Thought. According to the BLS report for April: "The change in total nonfarm payroll employment for February was revised from -14,000 to +39,000, and the change for March was revised from 162,000 to 230,000."  [BLS.Gov, 5/7/10, emphasis added]

The Economy Created 68,000 More Jobs In March Than Originally Thought. According to the BLS report for April: "The change in total nonfarm payroll employment for February was revised from -14,000 to +39,000, and the change for March was revised from 162,000 to 230,000."  [BLS.Gov, 5/7/10, emphasis added] 

The Recovery Act Has Turned The Economy Around

The Economy Grew At 3.2% In The First Quarter Of 2010. According to the Associated Press, "The economy grew at a solid 3.2 percent pace during the first quarter of this year as consumers boosted their spending by the most in three years. The Commerce Department's initial estimate of the economy's performance in the January-to-March quarter, released Friday, provided more evidence that the economy is strengthening. It marked the third straight quarterly gain as the United States heals from the longest and deepest recession since the 1930s. Still, growth was weaker than in the fourth quarter of last year, when the economy grew at 5.6 percent. Consumers rebounded and powered the first-quarter's growth. They increased their spending at a 3.6 percent pace, the strongest showing since early 2007 - before the economy tipped into a recession." [Associated Press4/30/10]

The Economy Has Been Growing For Three Straight Quarters.  Below is a graph prepared by the Speaker's office showing GDP growth per quarter:

 

[Office of the Speaker, 4/30/10]

Rep. Akin Claimed That Current Positive Economic Indicators Are A Liquidity Bubble Caused By The Federal Reserve Lowering Rates

REP. TODD AKIN: So how come then is it that it appears that we are pulling out of the recession and starting to do better? Well obviously the answer to that question is that there are some other things that also affect our economy. In fact there's another thing that is even stronger than all of the policies that are so important that we get right down here. What is that force that is so powerful? Well in a way you could look at it as the crack cocaine of our economy... We have the equivalent of crack cocaine in our economic system in America. And that's the Federal Reserve, and their crack cocaine is to increase the money supply... On top of that increase in liquidity, they have dropped the interest rates down very low towards zero. Now what that does is it creates all this easy money that's looking for a home, and that has a tremendously stimulating effect on the economy-but a little bit like crack cocaine does to somebody who may be otherwise sick. [Akin Floor Speech, 5/12/10]

The Fed Has Kept Rates Steady Since December 2008, And Key Economic Indicators Began To Turn Around Following Passage Of The Recovery Act

The Federal Reserve's Key Interest Rate For Overnight Lending To Banks Has Been Near 0 Since 2008. According to CNN: "The fed funds rate, the central bank's key overnight lending rate, is a benchmark used to set interest rates on a wide variety of consumer and business lending. In December 2008, the Fed cut the rate to near 0% in an effort to spur economic activity, and has left it there ever since." [Money.CNN.Com, 4/28/10]

[Money.CNN.Com, accessed 5/12/10]

Job Creation Statistics Have Steadily Improved Since March 2009. Below is a graph prepared by the Speaker's office showing job gains/losses per month:

[Office of the Speaker, 5/7/10]

Rep. Akin Claimed That "Everyone Who Flips A Light Switch" Will Be Taxed By House Energy Bill

REP. TODD AKIN: I think you mentioned that failed stimulus bill. I'd call it a porkulus bill. $787 billion, really turned out to be $800 billion. And then you've got the tax on carbon. The cap and tax. So that's uh, something we didn't pa-we passed in the House but the Senate hasn't, fortunately hasn't confirmed it. Y'know the president made a promise, he said no one making under 250,000 bucks is gonna need to worry about getting taxed. And yet we passed a bill that the poor soul that flips a light switch is gonna be taxed. [Akin Floor Speech, 5/12/10]

Clean Energy Legislation Is Estimated To Cost Families Less Than A Postage Stamp Per Day

Reuters: "Climate Legislation Moving Through Congress Would Have Only A Modest Impact On Consumers." According to Reuters: "A new U.S. government study on Tuesday adds to a growing list of experts concluding that climate legislation moving through Congress would have only a modest impact on consumers, adding around $100 to household costs in 2020. Under the climate legislation passed by the House of Representatives in June, electricity, heating oil and other bills for average families will rise $134 in 2020 and $339 in 2030, according to the Energy Information Administration, the country's top energy forecaster." [Reuters8/5/09]

EIA: Clean Energy Legislation Would Cost Only $0.23 Per Day. According to a House Energy and Commerce Committee factsheet of the Energy Information Administration's analysis of the American Clean Energy and Security Act: "The U.S. Energy Information Administration (EIA) has completed an analysis of the American Clean Energy and Security Act (H.R. 2454), as passed by the U.S. House of Representatives... The overall impact on the average household, including the benefit of many of the energy efficiency provisions in the legislation, would be 23 cents per day ($83 per year).This is consistent with analyses by the Congressional Budget Office which projects a cost of 48 cents per day ($175 per year) and the Environmental Protection Agency which projects a cost of 22 to 30 cents per day ($80 to $111 per year)." [House Energy and Commerce Committee, EIA's Economic Analysis Of "The American Clean Energy And Security Act Of 2009," 8/4/09; emphasis original]

CBO: In 2020, Cap-And-Trade Will Only Cost An Average Of $175 Annually, "About A Postage Stamp A Day." In its analysis of the American Clean Energy and Security Act, the Congressional Budget Office wrote: "On that basis, the Congressional Budget Office (CBO) estimates that the net annual economy wide cost of the cap-and-trade program in 2020 would be $22 billion-or about $175 per household." Rep. Edward Markey noted it was "the cost of about a postage stamp a day." [CBO, 6/19/09; House Committee on Energy & Commerce Release, 6/20/09]

Cap-And-Trade Would DECREASE Energy Prices For Low-Income Americans. In its analysis of the American Clean Energy and Security Act, the Congressional Budget Office wrote, "households in the lowest income quintile would see an average net benefit of about $40 in 2020." [CBO, 6/19/09; emphasis original]

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