The Congressional Budget Office came out with a new report finding that not only did the nearly $1 trillion stimulus fail to stimulate the economy, it’s actually a drag on the long-term economy. What a shock. But of course, President Obama wants another half a trillion to waste.
The Washington Times has the story:
The Congressional Budget Office on Tuesday downgraded its estimate of the benefits of President Obama’s 2009 stimulus package, saying it may have sustained as few as 700,000 jobs at its peak last year and that over the long run it will actually be a net drag on the economy.
CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment and “will reduce output slightly in the long run — by between 0 and 0.2 percent after 2016.”
The analysis confirms what CBO predicted before the stimulus passed in February 2009, though the top-end decline of two tenths of a percent is actually deeper than the agency predicted back then.
All told, the stimulus did boost jobs and the economy in the short run, according to CBO’s models. At the peak of spending from July through September 2010 it sustained anywhere from 700,000 to 3.6 million, which lowered the unemployment rate by between four-tenths of a percent to 2 percent.
The Obama administration had promised 3.5 million jobs would be produced at the peak of spending. (Read More)
I still don’t know how they came up with the jobs “sustained” figures. Did they count Solyndra employees? Also, if you read the entire article linked above, you’ll find that the CBO didn’t count the “crowing out” effect in the short term, so it’s probably even worse than reported.