Obama's Stimulus: Five Years of Keynesian Fairy DustBy Daniel J. Mitchell
FEBRUARY 21, 2014
The country just “celebrated” the five-year anniversary of the so-called American Recovery and Reinvestment Act, more commonly referred to as the “stimulus.” The White House wants us to think the legislation was a success, publishing a report that claims the stimulus “saved or created about 6 million job-years” and “raised the level of GDP by between 2 and 3 percent from late 2009 through mid-2011.”
These seem to be preposterous claims. According to data from the Minneapolis Federal Reserve’s interactive website, the current recovery (red line) is the weakest expansion since World War II. And keep in mind that this anemic recovery started in the summer of 2009, right about the same time as the stimulus was beginning. So if the President’s plan was effective, it should be apparent in the growth numbers.
And the second chart shows that the labor market numbers are equally dismal. We’re stumbling through the second-worst recovery for job creation in the post-WWII era based on Minneapolis Fed data. The red line shows changes in total employment since the summer of 2009 and the results are lackluster at best. If this is a sign of a successful stimulus, it takes a vivid imagination to see what failure looks like.
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http://thefederalist.com/2014/02/21/obamas-stimulus-five-years-of-keynesian-fairy-dust/
