It’s important to knock down these conservative claims about the stimulus, which haven’t gotten any more factually accurate over time. And it’s not just a matter of correcting the historical record — people shouldn’t be made to be afraid of proactive government intervention, which the economy undoubtedly needs more of.
Many of the things Republicans are saying today about the stimulus bill are predicated on a similar and presumably deliberate misunderstanding: that the legislation was meant to permanently fix the economy.
“Five years later, underemployment is still too high, the number of people that have dropped out of the workforce is astounding, unemployment remains stubbornly high and our economy isn’t growing fast enough — proof that massive government spending, particularly debt spending, is not the solution to our economic growth problems,” said Rubio.
But the stimulus bill was meant to provide a temporary bump to the economy — and it did just that. Here are the facts:
- Gross domestic product and total payroll employment were at historic lows when the stimulus passed, and private-sector layoffs were peaking. All three of these very important indicators began to turn around almost exactly the moment the stimulus passed. (The Center for American Progress has some great charts here.)
- The Congressional Budget Office concluded that the GDP in the fourth quarter of 2009 was as much as 3.8 percent higher than it would have been without the stimulus.
- At the end of 2010, there were approximately 2.5 million more jobs in the country that wouldn’t have existed without the stimulus, according to Mark Zandi of Moody’s Economy.com.
- The bill kept nearly 6 million people out of poverty in 2009, according to the Center on Budget and Policy Priorities (CBPP).
Most of the spending measures in the stimulus bill have expired, but the point is that it did what it was supposed to do. For Republicans to simply say “the economy is still bad, so the stimulus was a failure” is a cheap misdirection.
The other main argument against the bill has been that it puts the country too deeply in debt. But critics are wrong again. The stimulus act only exacerbated the long-term budget problem to a very small degree — it added just 3 percent to the budget shortfall through 2050, according to CBPP.
Rubio and his colleagues are, of course, broadly right about the poor fundamentals of the economy, but what the country needs is more of the sort of help the stimulus act provided, not less. Republicans have spent years blocking similar measures, like the American Jobs Act, from becoming law. Each time, they’ve advanced these empty arguments about the efficacy and cost of the stimulus bill. If Democrats want to eventually enact more government help, they’d be wise to push back.