For months, conservatives have been claiming that the American Recovery and Reinvestment Act (ARRA, i.e. the stimulus) is a “boondoggle” that “failed” and did not create “one new job.” But last week, the New York Times’ David Leonhardt noted that economic research firms estimate that ARRA created or saved 1.6 to 1.8 million jobs. And today, the non-partisan Congressional Research Office placed the estimate even higher, saying that ARRA is responsible for up to 2.1 million jobs in the 4th quarter of last year:
CBO estimates that in the fourth quarter of calendar year 2009, ARRA added between 1.0 million and 2.1 million to the number of workers employed in the United States, and it increased the number of full-time-equivalent jobs by between 1.4 million and 3.0 million…CBO also estimates that real (inflation-adjusted) gross domestic product (GDP) was 1.5 percent to 3.5 percent higher in the fourth quarter than would have been the case in the absence of ARRA.
CBO calculated that without the stimulus package, the unemployment rate would be up to 1.1 percent higher. It also said that unemployment is higher than analysts predicted after passage of the ARRA due to “greater-than-projected weakness in the underlying economy rather than lower-than-expected effects of ARRA.”