1. You've heard about the crazy numbers of 'jobs created or saved'? Even the CBO admits those numbers are fishy:
"Recipients report that about 640,000 jobs were created or retained with ARRA funding through September 2009. Such reports, however, do not provide a comprehensive estimate of the law’s impact on employment in the United States. That impact may be higher or lower than the reported number for several reasons (in addition to any issues about the quality of the data in the reports)." First, it is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus package."
2. Something I didn't know existed in the Stimulus package: "The [recipient jobs] reports do not measure the effects of other provisions of the stimulus package, such as tax cuts and transfer payments to individuals."
Some of us call those 'handouts' or 'welfare'. And what happens when that 'stimulus' money runs out? The people receiving those 'transfer payments' will no longer be stimulated, whereas, say a permanent tax cut would have permanent stimulus effects.
3. So how did the CBO arrive at a result for the effect of the stimulus on the economy?
"... looking at the actual amounts spent so far (where identifiable) and estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law’s impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy."
"... looking at the actual amounts spent so far (where identifiable) and estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law’s impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy."
So nothing in this report is a FACT, only an ESTIMATE.
4. So what did they ESTIMATE the impact to be? That the stimulus increased the GDP 1.2-3.2%. But check out Table 1. Estimated Macroeconomic Impact of the American Recovery and Reinvestment Act in the Third Quarter of Calendar year 2009. Their March estimates are almost exactly the same as their November estimates! Why is that? Because to date, nothing the CBO has studied has generated any "significant change in CBO's assessment of those relationships between changes in government policy and changes in output and employment". So what does this tell me? They are sticking with their original estimates, come hell or high water. Oh, and just forget that we were told unemplyment would peak at 8.5% WITHOUT the stimulus.
Think I'm exaggerating? Here's what they say next:
"CBO has also examined incoming data on output and employment during the period since ARRA’s enactment. However, those data are not as helpful in determining ARRA’s economic effects as might be supposed, because isolating the effects would require knowing what path the economy would have taken in the absence of the law. Because that path cannot be observed, the new data add only limited information about ARRA’s impact.Economic output and employment in the spring and summer of 2009 were lower than CBO had projected at the beginning of the year. But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects of ARRA."
5. It's getting late and I'm getting tired. Read the whole thing yourself, it's only 20 pages. Think about it: this is a required government report on the effectiveness of a HUGE bill. And all they can come up with are estimates and judgments. Is that what we want from our government?
