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Research Note: Obama’s Economists Downgrade Their Stimulus

RNC Communications - July 5, 2011

You may have missed the Council of Economic Advisors’ (CEA) quarterly report on the stimulus that was released as part of Friday’s news dump from the White House but there were a few key factoids that should not go unnoticed. Buried in the report is the fact that with $666 billion spent so far, Obama’s CEA, the Congressional Budget Office and Moody’s Mark Zandi have all downgraded their assessment of the stimulus’ effect on jobs. In the third quarter of 2010, the CEA said the stimulus “saved or created” 2.68 million jobs. Today, in the first quarter of 2011, the CEA has reduced that number to 2.39 million “saved or created.” It seems that the White House projections are going in the wrong direction and despite the administration’s models of “saved or created”, the fact is that 1.8 million jobs have been lost since the stimulus passed in February 2009 according to BLS. See the full breakdown from RNC Research below:

In A Holiday Weekend News Dump, Obama’s Council Of Economic Advisors Downgrades Their Estimate Of The Stimulus’ Effect On Jobs

Obama’s CEA Projected In The Third Quarter Of 2010 That The Stimulus Was Responsible For 2.68 Million Jobs. (Council Of Economic Advisors, “The Economic Impact Of The American Recovery And Reinvestment Act Of 2009 – Seventh Quarterly Report; Table 3,” WhiteHouse.gov, 7/1/11)

  • For The First Quarter Of 2011, Obama’s CEA Actually Reduced Their Estimate Of The Stimulus’ Effect By 288,000 Jobs To 2.39 Million. (Council Of Economic Advisors, “The Economic Impact Of The American Recovery And Reinvestment Act Of 2009 – Seventh Quarterly Report; Table 3,” WhiteHouse.gov, 7/1/11)
  • Their Estimate For The Stimulus’ Contribution To GDP Has Also Been Reduced During The Same Period From 2.7 Percent To 2.3 Percent. (Council Of Economic Advisors, “The Economic Impact Of The American Recovery And Reinvestment Act Of 2009 – Seventh Quarterly Report; Table 3,” WhiteHouse.gov, 7/1/11)

The CBO And Moody’s Mark Zandi Also Downgraded Their Assessment Of  The Stimulus’ Performance

The CBO Downgraded Their Assessment From Between 1.4 Million To 3.6 Million Jobs In The Third Quarter Of 2010 To Between 1.2 Million And 3.3 Million Jobs In The First Quarter Of 2011. (Council Of Economic Advisors, “The Economic Impact Of The American Recovery And Reinvestment Act Of 2009 – Seventh Quarterly Report; Table 8,” WhiteHouse.gov, 7/1/11)

Moody’s Mark Zandi Downgraded His Assessment From 2.52 Million In The Third Quarter Of 2010 To 2.47 Million In The First Quarter Of 2011. (Council Of Economic Advisors, “The Economic Impact Of The American Recovery And Reinvestment Act Of 2009 – Seventh Quarterly Report; Table 8,” WhiteHouse.gov, 7/1/11)

No Wonder The The CEA Dumped Their Report On A Friday Afternoon Before A Holiday Weekend, Their Claims Are A “Nonstarter When 14 Million Americans Are Looking For Work.”

Frank Rich In New York Magazine: “The White House’s Repeated Argument That The Stimulus Saved As Many As 3 Million Jobs, Accurate Though It May Be, Is Another Nonstarter When 14 Million Americans Are Looking For Work.” (Frank Rich, “Obama’s Original Sin,” New York Magazine, 7/3/11)

Since The Stimulus Was Passed, The U.S. Has Lost 1.8 Million Jobs. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed: 6/3/11)

  • Obama Promised That His Stimulus Plan Would Create Or Save 3.5 Million Jobs Over Two Years. OBAMA: “Now, what makes this recovery plan so important is not just that it will create or save 3.5 million jobs over the next two years ...” (President Barack Obama, Remarks At The Signing Of The American Recovery And Reinvestment Act, Press Release, Denver, CO, 2/17/09)

The National Unemployment Rate Is 9.1 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed: 6/3/11)


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