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Do media really think Obama promised stimulus alone would fill 8 million-job hole?

Posted in Main Blog (All Posts) on June 30th, 2010 4:50 am by HL

Do media really think Obama promised stimulus alone would fill 8 million-job hole?

Media figures have falsely suggested that Vice President Joe Biden admitted the stimulus failed when he said, “There’s no possibility to restore 8 million jobs lost in the Great Recession.” In fact, the administration said all along that the stimulus would mitigate job losses but that government action alone could not restore all of the jobs lost since December 2007 and that “the private sector needs to do the rest.” In addition, private analysts have said the stimulus significantly raised employment over what would have occurred otherwise, and Congressional Budget Office estimates show that the unemployment rate is expected to return to pre-recession levels in the coming years.

Biden was neither saying that the stimulus failed to create jobs nor that employment levels would never recover

Biden was not saying that the stimulus failed nor was he saying that employment levels would never return to pre-recession levels. The Obama administration has long maintained that the stimulus was necessary in order to stem job losses and jump-start the economy but that the government alone would not be able to restore all of the jobs lost due to the recession. The administration has repeatedly argued that the government could provide a start to the recovery, but that “the private sector needs to do the rest.” In his comments, Biden was press conference, President Obama cited “the magnitude of the crisis” and stated that even with the stimulus package that would save or create millions of jobs, “[t]hat still means that you’re going to have some net job loss” in the short term, “but at least we can start slowing the trend and moving it in the right direction.”

Obama: Stimulus “not expected to restore the economy to full health on its own but to provide the boost necessary to stop the free fall.” Obama wrote in a July 12, 2009, Washington Post report on the job impact of a “prototypical” stimulus package “in the range that the President-Elect has discussed,” Christina Romer and Jared Bernstein estimated that a stimulus package would raise employment by between “3.3 to 4.1 million jobs” by the end of 2010. The report clearly notes that this estimate is calculated “relative to the no-stimulus baseline.”

CBO, Obama admin. expect unemployment rate to return to pre-recession levels by 2016

Administration estimates that unemployment rate will fall to 5.5 percent in 2016. The Obama administration’s 2011 budget estimates that the unemployment rate will fall to 5.9 percent in 2015 and to 5.5 percent in 2016. The budget estimates that the unemployment rate will be 5.2 percent in 2020.

CBO expects unemployment rate to return to 5 percent mid-decade. The nonpartisan Congressional Budget Office (CBO) stated in January 2010: “CBO expects that the unemployment rate will average slightly above 10 percent in the first half of 2010 and then turn downward in the second half of the year. As the economy expands further, the rate of unemployment is projected to continue declining until, in 2016, it reaches 5 percent.” From CBO:

cbo_unemployment

Independent and private analysts agree stimulus significantly raised employment over what would have happened otherwise

CEA: As of first quarter of 2010, ARRA raised employment “by between 2.2 and 2.8 million.” In its third quarterly report on the American Recovery and Reinvestment Act of 2009, the Council of Economic Advisers (CEA) stated: “The CEA estimates that as of the first quarter of 2010, the ARRA has raised employment relative to what it otherwise would have been by between 2.2 and 2.8 million. These estimates are similar to those of other analysts, and are broadly consistent with the direct recipient reporting data available for 2009:Q4.”

CBO estimates job impact of between 1.2 and 2.8 million. CBO estimated in May that as of the first quarter of 2010, the stimulus package “[i]ncreased the number of people employed by between 1.2 million and 2.8 million” and “[i]ncreased the number of full-time equivalent jobs by 1.8 million to 4.1 million compared with what those amounts would have been otherwise.” CBO also estimated that the unemployment rate would be 0.7 percent to 1.5 percent higher today without the stimulus package.

IHS/Global Insight estimates job impact of 1.7 million “by the first quarter of 2010.” PolitiFact.com stated on February 17 that “[u]sing updated estimates provided to PolitiFact, IHS/Global Insight estimates that 1.7 million jobs will be created or saved by the first quarter of 2010.” The CEA report also cites this estimate from IHS/Global Insight.

Moody’s Economy.com estimates job impact of 1.9 million by the first quarter of 2010. The PolitiFact.com post further stated that “[u]sing updated estimates provided to PolitiFact … Moody’s economy.com estimated that 1.9 million jobs will be created or saved” by the first quarter of 2010. The CEA report also cited this estimate from Moody’s Economy.com.

Macroeconomic Advisers estimates job impact of 1.5 million in first quarter of 2010. The CEA report stated that Macroeconomic Advisers estimates that the Recovery Act raised employment by 1.46 million as of the first quarter of 2010, citing an analysis provided to CEA.

Economists say stimulus helped economic recovery

Wall Street Journal: 70 percent of economists surveyed said stimulus helped. The Wall Street Journal reported on March 12 that 38 of the 54 economists it surveyed “said the American Recovery and Reinvestment Act boosted growth and mitigated job losses, while six said the legislation had a net negative effect.”

ABC News: Most on panel of economists “think the economy would be worse” without the stimulus. ABC News reported on February 18 that “most” of the economists on its panel “think the economy would be worse today without the big aid package, which totaled $787 billion and was signed into law by President Obama on Feb. 17, 2009.”

NABE: 83 percent say stimulus raised GDP. A February survey of 203 members of the National Association for Business Economics (NABE) found that “[e]ighty-three percent believe that GDP is currently higher than it would have been without the 2009 stimulus package (ARRA).”

USA Today: Surveyed economists said “stimulus package saved jobs.” USA Today reported on January 25:

President Obama’s stimulus package saved jobs — but the government still needs to do more to breathe life into the economy, according to USA TODAY’s quarterly survey of 50 economists.

Unemployment would have hit 10.8% — higher than December’s 10% rate — without Obama’s $787 billion stimulus program, according to the economists’ median estimate. The difference would translate into another 1.2 million lost jobs.

Media falsely suggest Biden’s remarks were an “admission” that stimulus failed

Limbaugh: “Either Joe Bite Me has rebuked Obama or he’s telling us our president’s been a spectacular failure.” From the June 28 edition of Rush Limbaugh’s radio show:

LIMBAUGH: Joe Bite Me announced this weekend America would never, ever be able to create enough jobs to recover from the Great Recession. That’s not what we were promised, folks. That’s not what Obama told us when he took $1 trillion in the Porkulus bill. It’s not what he told us when he was immaculated. Either Joe Bite Me has rebuked Obama or he’s telling us our president’s been a spectacular failure, just like Jimmy Carter.

Moore: “This is quite an admission of failure.” From the June 28 edition of Fox News’ On the Record:

GRETA VAN SUSTEREN (host): Joining us live is Steve Moore. He’s a senior economics writer for The Wall Street Journal editorial page. Now, Vice President Biden is saying that we are not going to get those 8 million jobs back.

MOORE: Now he tells us, because it was his office, Greta, that exactly a year-and-a-half ago was saying if we pass this economic stimulus, we will create 3 million jobs. So, this is quite an admission of failure.

Doocy: “We found out from Joe Biden” that job creation isn’t “happening the way they thought.” From the June 28 edition of Fox News’ Fox & Friends:

STEVE DOOCY (co-host): So, Frank, now voters are moved by the fact that if you’re on the left and you voted for President Obama, you thought he was going to end the war quickly. You thought he could probably plug up that hole in the Gulf floor a little faster, and you thought that he could actually create jobs. But we found out from Joe Biden a couple of days ago, that’s not happening the way they thought.

Beck says “we should fire” Biden if he doesn’t think we can create 8 million new jobs. From the June 28 edition of Glenn Beck’s radio show:

BECK: Now The New York Times is carrying the water for the president of the United States, in particularly Joe Biden, who says we are not going to be able to replace those jobs. Well, then we should fire your ass and make you unemployed. Because you are the guy who said — I’m sorry, your boss is the guy who said only the federal government could create these jobs. Only the federal government. 

Well, if you don’t think you can now do it, well, welcome to the party, because that’s what we’ve been saying the whole time. The federal government doesn’t create jobs; the federal government creates redistribution of wealth. And if you really believe now that America cannot create 8 million new jobs, get the hell out. Resign. Because I know America can, but we need you out of office. We need the clowns in Washington to leave us, the job creators, alone.

IBD: Stimulus “didn’t work”; even Biden “admit[ted]” that 8 million jobs can’t be restored. From a June 28 Investor’s Business Daily editorial:

Krugman was among those who encouraged the new Obama administration and the Democratic Congress to spend massive amounts of money early on in a kind of Keynesian frenzy to shock the moribund economy back to life.

It didn’t work. With a stimulus — a deficit, that is — of nearly 11% of GDP, our economy is barely growing, while unemployment remains shockingly close to 10% of the adult working population.

This even prompted our nation’s vice president, Joe Biden, to admit last weekend: “There’s no possibility to restore 8 million jobs lost in the Great Recession.”

And he’s right — at least with current policy, which is based on massive spending, new tax hikes, trillion-dollar deficits for decades to come and tight government control of vast swaths of our nation’s economy, from banking to autos to energy.

Hoft: Biden “admits” Obama admin. “won’t be able to create lost jobs.” In a June 26 Gateway Pundit blog post, Jim Hoft wrote, “Biden Admits Obama Administration Won’t Be Able to Create Lost Jobs.” Hoft further wrote, “Joe Biden announced on Friday that the Obama Administration will not be able to replace the jobs that were lost during the recent recession.” His post also included a misleading chart comparing the average unemployment rate over the eight years of the Clinton and Bush administrations to the less than two years of Obama’s presidency, which began in the middle of a deep recession.

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