By Peter Roff, Thomas Jefferson Street blog
To put it kindly, the stimulus package that President Barack Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi rushed through Congress at the beginning of his presidency has been a flop. It is not just that the $789 billion package has not had the effect the White House promised it would; it's that it may actually have been counterproductive, actually lengthening the recession by effectively taking money out of the private economy, where it could have been used to create jobs and for investment purposes. Instead it has been parceled out by the government, which has been unable to track where it has gone or what impact it has really had on job creation. And that has led to any number of fallacious statements by senior administration officials about jobs "created or saved."
There is really no way to assess the number of jobs "saved," which has been the principle rallying cry of the White House over the last few months. Moreover, as data released Friday by the Republicans on the House Committee on Ways and Means makes clear, payroll employment has declined in every state except North Dakota and in the District of Columbia in the nine months since the American Recovery and Reinvestment Act has been law. Likewise the national unemployment rate, which Obama promised would not exceed 8 percent if the stimulus became law, has reached a 25-year high of over 10 percent.
As the table below indicates, in no state has anything like the promised job creation occurred. In Alabama, for example, the White House estimated that the stimulus package would generate 52,000 jobs by the end of calendar 2010. Yet the government's own figures show the state has lost a net 30,700 jobs through the end of November 2009. In Illinois, which sent Barack Obama to Washington back in November 2004, the White House estimated a net increase of 148,000 jobs but the state has lost more than 150,000 thus far.
In California, the home state of House Speaker Nancy Pelosi, the prediction was that 396,000 new jobs would be created by the end of next year. So far it has lost just over 340,000. In Nevada, where Senate Majority Leader Harry Reid is in the fight of his political life as far as his 2010 re-election bid is concerned, the estimates predicted 34,000 new jobs would be created. So far this year, since the stimulus has been enacted, it has lost more than 50,000.
All told, the nation has lost 2.6 million jobs since the "shovel ready" stimulus dollars started to flow, rather than create the promised 3.5 million, putting the Obama administration 6.1 million jobs in the hole. That's a lot of jobs to make up in twelve months, and at a pace that would outstrip even the Reagan Recovery, which ultimately created 20 million new jobs by the end of his eight-year presidency.
It is now abundantly clear, even as rumors of a third stimulus package continue to circulate, that a new approach to job creation is needed.