This is exactly wrong. Virtually all independent economists agree that the stimulus package has created jobs and was necessary.
To defend his position, Mr. Kerst quotes a 2008 statement from the Congressional Budget Office, which he correctly described as “renowned for unbiased information.”
Why 2008? If he checked the CBO today, he would find a report by the director, titled “Estimated Impact of the American Recovery and Reinvestment Act (the stimulus package) on Employment and Economic Output.” In it, the director of the CBO writes: “… in the fourth quarter of the calendar year 2009, ARRA added between 1 million and 2.1 million to the number of workers employed in the United States.”
That’s just in the fourth quarter!
The CBO director continues: “… real 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.”
In my most recent column, I described findings of three different private forecasting companies. The three firms all concluded that the stimulus reduced unemployment by around 2 percent and increased the GDP by about the same amount.
Mark Zandi, the chief economist of Moody’s Economy.com, is a highly regarded economist and has testified before Congress about the economy. In January, he reported, “… the Great Recession gave way to economic recovery this past summer, due largely to the benefits of the fiscal stimulus. The stimulus did what it was supposed to do.”
On Feb. 14, Gov. Arnold Schwarzenegger was on ABC’s “This Week” and repeated his conclusion that the stimulus had created or saved 150,000 jobs in California.
This past Sunday, on CNN’s “GPS,” Financial Times editor Lionel Barber said, “The stimulus is absolutely necessary.”
Remember Mr. Kerst’s contention that “few people” agreed that the United States was “better off with the stimulus than without it”?
Mr. Kerst also referred to the stimulus package as “Porkulous I.” Apparently, he doesn’t actually know what is in it. That largest part of the stimulus is actually tax cuts, chiefly an extension of the expired tax cuts of President George W. Bush and a reduction in the Alternative Minimum Tax.
The second part of the ARRA stimulus is direct money transfers to the states, which have suffered a meltdown in revenue due to declining property taxes, income taxes and sales taxes.
A third part is spending, mostly for private jobs on infrastructure improvement. There has been some criticism that this part of the package has been slow to get started. Zandi, in his testimony before Congress, said the criticism is valid, but added, “This is partly because safeguards against funding unproductive or politically driven projects have slowed things down.”
Mr. Kerst has changed his tune. He no longer contends that the stimulus has not helped. In his most recent letter, he wrote of the stimulus, “No net new jobs — zero — were created.”
Wait a minute, you might respond. That sounds like what he has been saying all along. If that is what you are thinking, you’ve been tricked. The trick is the word “net.”
The folks on the extreme right used to say that the stimulus was a failure and that it didn’t produce any jobs. But facts and reality are stubborn things. The right-wingers have now moved the goal posts.
It is no longer sufficient for the $800 billion stimulus to produce a few million jobs. The new standard deems the stimulus successful only if every person unemployed is rehired, plus one — one net new job!
There are 8 million unemployed Americans. Putting them to work in a single year would require an effort the size of World War II. Re-employing just the 2009 unemployed would necessitate a program on the scale of the war in Vietnam.
The fact that folks on the extreme right have had to change their definition of success for the stimulus to “net new jobs” is an admission that they have been wrong all along.
• Mickey McGuire, a retired high school social studies teacher, is among a select group of local residents with columns in the Tracy Press.