The American Recovery and Reinvestment Act, better known as the stimulus, became law three years ago this week, signed by President Obama less than a month into his presidency. At the time, financial and housing crises had plunged the American economy into a deep recession — in January 2009, the economy lost more than 800,000 jobs, more than in any single month in 60 years.

With its investments into infrastructure projects, tax cuts, and aid to states, the stimulus was designed to curb the effects of the recession and turn the economy back around. Though Republicans have criticized the effort and subsequent attempts to stimulate the economy as “failed policies,” early analysis has shown that the stimulus saved and created millions of jobs and pulled the American economy away from the precipice of collapse.

In a new analysis, Center for American Progress Director for Tax and Budget Policy Michael Linden examined the American economy in three parts — before the recession, during the recession, and after the stimulus passed — to find out if the stimulus did, indeed, work. As the video below shows, there is no doubt that the stimulus turned the economy around and put it on the path to recovery:

The Recovery Act of 2009 (i.e. the stimulus) has, according to the Congressional Budget Office, been employing more than 3 million people this year, while saving millions more from poverty through boosting programs like unemployment benefits. Though it was not large or targeted enough to deal with the depth of the Great Recession, the stimulus has been an extraordinary help to a struggling economy.

However, if Mitt Romney had been president in 2008, according to a campaign spokesman, he wouldn’t have passed the Recovery Act. Instead, he would have cut taxes for corporations and extended the Bush tax cuts, as well as opening up land for oil drilling:

Asked what President Romney would have done during his first days in office, in lieu of a federal stimulus, to address the market meltdown, Chen rattled off a few likely options: “Lowering the corporate tax rate. Enacting a permanent extension of the 2001 and 2003 tax cuts. Immediately ratifying our pending trade agreements with Colombia, Panama and South Korea. In the energy sector, freeing up the necessary land to enable greater domestic production.” He did not make clear how Romney would have steered these boilerplate conservative proposals through a Democrat-controlled Congress.

According to the CBO, extending income tax cuts and cutting the corporate tax rate are two of the least effective strategies for boosting economic growth and employment. For extending income tax cuts, only 10 cents to 60 cents in economic activity is created for every dollar spent. It’s at most 30 cents in economic activity for every dollar spent on corporate tax cuts.

Meanwhile, steps that put money directly into the pockets of low- and middle-income families or directly create jobs, like cutting payroll taxes or spending on infrastructure, have far higher bang-for-the-buck. These are the sorts of policies that President Obama has proposed in his American Jobs Act, but that Republicans have filibustered over and over.

It was the slew of tax cuts that were added to the stimulus in a misguided attempt to win Republican votes that watered down its effectiveness in the first place. If Romney had been running the show, that ratio would have evidently been even worse. Of course, considering that Romney’s economic plan consists of nearly $7 trillion in tax cuts that overwhelmingly go to the rich and corporations, perhaps this shouldn’t be a surprise.

There has been plenty of stimulus hypocrisy within the GOP — as Republican lawmakers try to take credit for jobs and projects funded by the Recovery Act that they opposed — but few have managed to register on the hypocrite dial before even getting on the campaign trail. However, that’s what former Gov. Tommy Thompson (WI) did when he announced yesterday that he will contend for the GOP nomination for Wisconsin’s Senate seat that is being vacated by retiring Sen. Herb Kohl (D).

Thompson has been a critic of the Recovery Act, saying that he was “disturbed” with the direction of the country following the stimulus vote, and his advisers highlighting it as an example of “runaway government spending.” But as it turns out, Thompson decided to kick off his campaign at a company that has benefited from stimulus dollars:

Former Gov. Tommy Thompson hasn’t been afraid to attack others for backing President Barack Obama’s controversial stimulus package. [...] So isn’t it odd that Thompson is officially launching his bid for the U.S. Senate today at a company that directly benefited from the Recovery Act?

Federal records show Weldall Manufacturing in Waukesha was awarded $300,000 in stimulus dollars in October 2010 under an energy project overseen by the state Department of Administration. Here are the project specifics.

The funding created about 100 jobs at the company. Not only did the Recovery Act help at that company, but it also went to aid several companies with which Thompson is involved. In fact, “Logistics Health of La Crosse – of which Thompson is the president – got $277,000 stimulus dollars for 3 contracts.”

Thompson explained that he was unaware that the company at which he made his announcement had received Recovery Act funding, but that “it was a good thing if it created jobs.”

The European economy grew just 0.2 percent in the third quarter as it remained plagued by the continent’s spreading fiscal crisis, according to official data released by the European Union today. The crisis has only deepened as countries have enacted massive austerity plans, forcing through widespread budget cuts that have stunted economic growth. In Spain, austerity has driven the unemployment rate to 21.5 percent.

As Europe continues its slide, the effects are sure to be felt in the United States, where the threat of a recession in 2012 is now greater than 50 percent. “It is not something that we would be insulated from,” Federal Reserve Chairman Ben Bernanke said last week. “I don’t think we would be able to escape the consequences of a blow-up in Europe.”

But even with evidence that austerity is wreaking havoc on European economies, American policymakers remain intent on following that lead. But chasing Europe down the austerity hole is only ensuring that the U.S. will experience another “great recession,” according to economists surveyed by Politico:

“To engage in austerity right now would be a great mistake,” insisted Desmond Lachman, an economist with the conservative American Enterprise Institute. “It would push the economy into a great recession.” [...]

“We need to learn from the European recessions,” said David Walker, former comptroller general of the United States, “and structure our own program” accordingly. He, too, said he considers large, near-term budget cuts potentially disastrous. Walker and other experts said significant budget cuts are certainly necessary — eventually. But not now. [...]

“Austerity brings a cyclical contraction,” said Thomas Kleine-Brockhoff, a German who is senior director for strategy at the German Marshall Fund in Washington. “You can’t just slash. You also have to invest and reform.” In his view, U.S. politicians don’t seem to appreciate this because they hold “a dangerous philosophy of American exceptionalism, as if they were exempt from the rules of finance.”

Despite these warnings, congressional leaders — particularly on the right — continue to push for massive spending cuts to a variety of programs, while opposing economic stimulus that could spark growth and recovery. The House will vote this week on a radical Balanced Budget Amendment that would force bigger spending cuts than even the fiscal super committee could ever dream of, drive up the unemployment rate, and ensure that future recessions will be even more painful.

The GOP, along with some moderate Democrats, has opposed the American Jobs Act, which would inject money into the economy in the form of infrastructure investment, aid to states to hire teachers and public safety officials, and other measures designed for job creation. Instead, they have focused on anti-regulatory, anti-spending policies that have little (if any) effect on job creation.

As these economists noted, clear evidence exists across the pond that widespread austerity measures will only stunt economic growth and push the U.S. closer to the brink of another recession. Unfortunately, Congressional leadership continues to ignore them.

Herman Cain

Listen to Herman Cain on the campaign trail, and you’ll hear him mock President Obama’s stimulus program a dozen different ways. Cain calls the program “a waste of money” that “didn’t stimulate anything other than bigger government” and a failure. One problem with Cain’s barrage of attacks? He sat on the board of directors of American corporations that applied for and received millions in stimulus money.

According to his personal financial disclosure (view a copy here), Cain supplements his income by being a board member for several large corporations. As a board member, he collected $202,500 from Agco Corporation, a farm products company, and $259,008 from Whirlpool Corporation (including options and a board salary). A review of stimulus spending records reveal that Cain’s companies have eagerly accepted stimulus money:

– Agco Corporation received up to $5 million of stimulus grants to develop “supply systems to handle and deliver high tonnage biomass feedstocks for cellulosic biofuels production.”

– Whirlpool Corporation received a $19,330,000 stimulus grant from the Department of Energy to develop SmartGrid solutions.

– Whirlpool launched a special offer to encourage customers to take advantage of the stimulus program’s energy efficient appliance program. The company advertised that certain Whirlpool, Maytag and KitchenAid appliances are available for rebate through the $300 million rebate program authorized by the stimulus.

– Whirlpool also received two stimulus grants of $2,042,700 to develop next generation energy efficient refrigerators.

Luckily for Cain, one of his corporations did not appear to receive any tainted stimulus money. According to his disclosure, Cain received $120,000 for his role on the board of Hallmark Cards Inc, the holiday greeting card company. A search by ThinkProgress reveals zero stimulus dollars directed to Hallmark.