CEA: No, Seriously, the Recovery Act is Working
by Sam Rosen-Amy, 4/15/2010
I feel sorry for the economists over at the White House's Council of Economic Advisors (CEA). Every quarter, they run the numbers and find that the Recovery Act is significantly helping the economy. Last quarter, the CEA found that the Act increased GDP between 1½ and 3 percentage points and created between 1½ to 2 million jobs. This time around they found that it created between 2.2 and 2.8 million jobs and raised first quarter GDP between 2.5 and 2.9 percent. In other words, the Recovery Act is pretty consistently helping the economy improve, and in fact its effects may be growing. But no one listens to them! It must be a frustrating job.
Here are the highlights of the report:
- The magnitude of the fiscal stimulus increased substantially in the first quarter of 2010 (from $83 billion in 2009:Q4 to $112 billion in 2010:Q1) largely because of a surge in tax refunds and lower final tax liabilities due to the Making Work Pay tax credit.
- Government investment outlays in areas such as infrastructure and clean energy, which increased $16 billion in 2010:Q1, are expected to rise further throughout 2010.
- 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 broadly similar to those of other analysts. Our estimates incorporate the most recent information about actual Recovery Act spending and tax reductions, as well as current trends in employment and production.
There's also a special section on Recovery Act taxes if you're into that kind of thing.