As others see it: Recovery act gives a boost
A report released Wednesday by the Council of Economic Advisers to the president should dispel any criticism that the $862 billion federal economic stimulus package -- the American Recovery and Reinvestment Act -- isn't doing any good.
The report finds that the Recovery Act is already responsible for 2.5 million to 3.6 million jobs, just shy of the year-end 3.5 million job target. Until President Obama took office, and the stimulus bill passed and signed into law shortly thereafter, America was losing jobs at a clip of 750,000 a month.
In Minnesota, the Recovery Act has cut taxes for 2 million working families and helped to spur 60,000 new jobs.
The Council of Economic Advisers issued its fourth quarterly report on the economic impact of the Recovery Act, and although the nation has a ways to go before plowing through the Great Recession, great strides have been made in a number of areas to help turn the economy in the right direction.
Following implementation of the act, the trajectory of the economy changed dramatically, the report states. Real Gross Domestic Product began to grow steadily starting in the third quarter of 2009 and private payroll employment has increased by nearly 600,000 since its low point in December 2009. The council estimates that the Recovery Act has raised the level of GDP as of the second quarter this year, relative to what would otherwise would have been, by between 2.7 and 3.2 percent.
The Recovery Act includes appropriations for $319 billion of public investment spending on projects ranging from roads and bridges to community health centers to a smarter electric grid. The council estimates the public investment spending has already created more than 800,000 jobs as of the second quarter of 2010, an increase of 30 percent over the first quarter.
The public spending comes at great risk -- a huge federal deficit is being left behind. That is what critics point to as being disruptive to economic recovery.
But the economic stimulus funding is slowly turning the wheels of a large train. It is hoped that the public spending and jobs will at some point trigger private sector job growth and expand the economy, starting the long process of erasing the federal deficit.
But government program spending will also have to be controlled, both in domestic and military spending, to keep growth rates down.
But meanwhile, committed stimulus funding is doing its work, if we give it time.