Skip to comments.CBO: Stimulus hurts economy in the long run
Posted on 11/22/2011 2:52:37 PM PST by kcvl
The Congressional Budget Office on Tuesday downgraded its estimate of the benefits of President Obamas 2009 stimulus package, saying it may have sustained as few as 700,000 jobs at its peak last year and that over the long run it will actually be a net drag on the economy.
CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up crowds out private investment and will reduce output slightly in the long run by between 0 and 0.2 percent after 2016.
The analysis confirms what CBO predicted before the stimulus passed in February 2009, though the top-end decline of two tenths of a percent is actually deeper than the agency predicted back then.
All told, the stimulus did boost jobs and the economy in the short run, according to CBOs models. At the peak of spending from July through September 2010 it sustained anywhere from 700,000 to 3.6 million, which lowered the unemployment rate by between four-tenths of a percent to 2 percent.
The Obama administration had promised 3.5 million jobs would be produced at the peak of spending.
For this current quarter CBO said the stimulus is sustaining between 600,000 and 1.8 million jobs, which has improved the unemployment rate by as much as 1 percent versus what it otherwise would have been.
The White House did not return a message seeking comment Tuesday afternoon, but the president has defended the stimulus package as a bulwark against an even weaker economy.
(Excerpt) Read more at washingtontimes.com ...
“The White House did not return a message seeking comment”
Gee, no sh!t!!!
Okay, who’s got The Captain Picard Double Facepalm pic...?
I LOVE that pic! And in this case, it is soooooo appropriate.
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