The President's Council of Economic Advisors (CEA) recently reported that the stimulus worked. It's clear -- according to our mounting debt and high unemployment rate -- that this is not true. Everyone needs a little brush up on their facts from time to time so House Republican policy put together a fact v. fiction sheet for you to consult. Check out a few of our gems below:
CLAIM: “As of the second quarter of 2010, we estimate that the Recovery Act has raised employment by 2.5 to 3.6 million relative to what it otherwise would have been.”
FACT: The stimulus has not created net jobs in the economy. According to the Bureau of Labor Statistics (BLS)—the official government agency responsible for tallying employment stats—there have been 3.42 million gross jobs lost since the stimulus was passed and 2.53 million net jobs lost.
CLAIM: “A key way that the CEA estimates the effects of the Recovery Act on GDP and employment is to use existing estimates of the macroeconomic effects of fiscal policy. That is, one can use mainstream estimates of economic multipliers for the effects of fiscal stimulus.”
FACT: The White House determines the impact of government stimulus spending by plugging numbers into a Keynesian “Multiplier Model.” This system simply multiplies the amount of dollars spent by the number of jobs the administration thinks the money should produce. This voodoo math doesn’t consider actual employment statistics, and thus allows the White House to claim that the stimulus is creating jobs as the economy sheds them.