In January, President Obama pressed for an $800 billion economic “stimulus” package to turn the economy around. Though the bill largely consisted of increased spending on traditional liberal priorities, the President claimed that it would “create or save” 3.5 million jobs. The President’s economic advisors predicted that unemployment would rise to 9 percent by 2010 if Congress did not pass the stimulus bill, but that with the stimulus unemployment would stay below 8 percentage points.
Congress passed the stimulus bill in February 2009 and the President has repeated his claims. President Obama recently said that the stimulus bill has already created or saved 150,000 new jobs and that it will “create or save” another 600,000 jobs by the end of the summer. Asked when the public should begin to judge the effects of the stimulus, White House Press Secretary Robert Gibbs said “I think we should begin to judge it now.”
In that case, the stimulus must be judged a failure. The figure above shows the projections the administration made in January with and without the stimulus bill, and the actual unemployment rate since then. Unemployment has risen not only above what the President’s advisors predicted would happen if the stimulus passed, but above what they estimated would occur without the stimulus. By the President’s own measure, the stimulus has failed. The promised benefits from the $800 billion in additional federal spending and debt remain invisible.