Research Briefing

Obama And Biden Announce ‘Summer Of Recovery,’ But Stimulus’ Failure Is A Matter Of Record

“Biden will present President Obama with a report laying out a spike in stimulus activity this summer, and how it will contribute to a steady climb to a total of 3.5 million Recovery Act jobs by the end of the year.” (Mike Allen, Politico “Playbook,” 6/17/10)

BUT THE STIMULUS HAS ALREADY FALLEN WELL SHORT OF PROMISES

Biden Said In “18 Months” Stimulus Will “Create 3.5 Million Jobs … Literally Drop-Kicks Us Out Of This Recession.” “[T]his about getting this out and spent in 18 months to create 3.5 million jobs and do -- to set -- tee this up so the rest of the good work that's being done here literally drop-kicks us out of this recession and we begin to grow again and begin to employ people again.” (Vice President Biden, Remarks At Recovery Plan Implementation Meeting,The White House, 2/25/09)

• STIMULUS FAILURE: Since The Stimulus Was Passed 2,253,000 Workers Have Lost Their Jobs. (Bureau Of Labor Statistics, “The Employment Situation – May 2010,” BLS.gov, 6/4/10)

STIMULUS GAP: In Order For The President To Keep His Promise That The Stimulus Would Create 3.5 Million Jobs By The End Of 2010, The Economy Would Need To Add 5,753,000 Jobs By The End Of The Year. (Bureau Of Labor Statistics, “The Employment Situation – May 2010,” BLS.gov, 6/4/10)

• That Equals 821,857 Jobs A Month, An Unprecedented Amount. (Bureau Of Labor Statistics, “The Employment Situation – May 2010,” BLS.gov, 6/4/10)

OBAMA’S STIMULUS: So Far, The Administration Has Spent $406 Billion Of The American Recovery And Reinvestment Act’s Funds. Despite This The Unemployment Rate Stands At 9.7%. (“Overview Of Funding,” Recovery.gov, Accessed 6/17/10; Bureau Of Labor Statistics, “The Employment Situation – May 2010,” BLS.gov, 6/4/10)

• Mark Zandi, Chief Economist At Moody’s, Says Unemployment Will Go Above 10 Percent And Remain There For A Few Months, Signaling A Weak Job Market. “Economist Mark Zandi expects the unemployment rate to float above 10 percent during the next few months as workers look to take advantage of improving opportunities.  The increase in unemployment is a sign of a stronger job market, but it is also a sign of how weak the job market still is and vulnerable the recovery is to anything that might go wrong,” Zandi wrote in an e-mail to The Hill.”  (Ian Swanson, “Higher Unemployment On Horizon, Posing Big Challenge For Dems,” The Hill, 5/13/10)

Obama: “More Than 90 Percent Of The Jobs Created By This Plan Will Be In The Private Sector.” (“Transcript: Obama’s Prime Time News Conference,” The New York Times, 2/9/09)

• STIMULUS IMBALANCE: Since The Stimulus Was Passed Public Sector Employers Have Added 399,000 Jobs While The Private Sector Has Shed 2,652,000 Jobs. (Bureau Of Labor Statistics, “The Employment Situation – May 2010,” BLS.gov, 6/4/10)

AND MEMBERS OF OBAMA’S ECONOMIC TEAM EXPECT UNEMPLOYMENT

 TO STAY “UNACCEPTABLY HIGH”

Treasury Secretary Timothy Geithner: “Unemployment Rate Is Still Terribly High” And “It Is Going To Stay Unacceptably High For A Long Period Of Time.” (NBC’s “Today Show,” 4/1/10)

White House Advisor And Former Fed Chair Paul Volcker: “Unemployment will be too high for far too long. . .” (Jo Mannies, “Volcker Predicts Economic Recovery Will Be ‘Long Slog,’” The St. Louis Beacon, 5/4/10)

CEA Chairwoman Christina Romer: “We still have some trouble with debt and credit availability. All of that makes it harder for us to grow … most of the forecasts are that we’ll grow about 3% real GDP … That’s not enough to get a lot of job growth.” (NBC’s “Meet The Press,” 4/4/10)

NEC Chair Larry Summers: “[W]hen the economy recovers, five years from now, assuming we return to normal cyclical conditions, one in six men who are 25 to 54 will not be working at any point in time.” (Jay Heflin, “Summers Predicts Perpetually High Unemployment,” The Hill, 4/30/10)