3 years later, did the stimulus work?
By Congressman Randy Forbes, March 2, 2012
Contact: Jessica Mancari
It was early 2009. The economy was in decline and the world was watching Washington to see what it would do. We need to jump start the economy, leaders in Washington said. We have to take strong measures in order to keep unemployment from rising, we heard. If we spend this money now, we can “save or create 3.5 million jobs,” our President declared from the House Speaker’s rostrum before a Joint Session of Congress.
This February marked the third anniversary of the unprecedented trillion-dollar “stimulus” package passed that year under House Speaker Nancy Pelosi and President Obama (The Congressional Budget Office estimates the cost of the stimulus will reach $825 billion and interest on the debt for the stimulus will be at least $347 billion) over the ten year period between 2009-2019. The American Recovery and Reinvestment Act (H.R. 1) was rushed through the House and Senate being sold on the promise that it was vital to protect American jobs.
However, the reality of the 2009 stimulus tells a different story. Consider the following:
• With 1.1 million jobs lost since the stimulus was enacted (at a total cost of $1.172 trillion), the stimulus spent more than $1 million for every job America lost since it was enacted.
• Median household income dropped $3,378 in 2010, falling to its lowest level since 1996. Household income has fallen by 6.4 percent since 2007.
• At the time the bill was signed into law, the national unemployment rate stood at 7.6 percent. Unemployment has now been above 8 percent for 36 straight months.
• The U.S. ranks 13th in ease of starting a business in the world according to a World Bank report. In 2007, the U.S. ranked 3rd.
• The number of Americans on food stamps is at an all-time high, while the number of new business start-ups is at a 17-year low.
To be fair, President Obama's stimulus package was not the first. The Bush Administration passed the first – albeit smaller – stimulus package in early 2008 under a similar promise that it would provide a boost to the economy. I was one of only 17 Members of Congress to vote against every stimulus and bailout under both the Bush and Obama Administrations because I believed that these packages would not work. I was not willing to put the future of our nation at risk for a 30-second sound bite stating a goal to save millions of jobs.
Now, three years since the stimulus passed, the facts show that the stimulus has arguably failed to create anything except for the largest federal government in history and record debt — a debt, in fact, that has exceeded the size of our entire economy. While there have been modest gains in employment since the peak jobless rate of 10 percent, we have not seen these levels of consecutive unemployment since the end of World War II.
Quite simply, the stimulus package has failed.
In the face of such failure, we have a tendency to look at the current economic situation and the seemingly insurmountable debt ahead of us and say that America’s best days are behind us. However, I believe that it is never wrong or too late to do what is right for America. Hardworking taxpayers deserve better than a future of debt, doubt and despair. As long as there are those of us who are willing to stand up for the principles our nation was founded upon – principles of liberty, freedom, hard work, and responsibility – there will always be an opportunity to change the course of our nation.
Instead of short-term fixes, we need a long-term approach.
Create Regulatory Accountability. Each new regulation creates even greater uncertainty for business owners. Without consistency, businesses cannot safely invest, simply because they cannot tell whether new regulations will make their investments unprofitable. Without new investment, we cannot expect new jobs for our economy. Read about my solutions to rein in regulations here.
Protect Jobs for Americans. With over 12 million unemployed Americans, we cannot afford for illegal aliens to hold jobs that could have gone to American workers. Read about my work to protect jobs for those authorized to work in America here.
Develop lasting energy solutions. The energy industry has the potential to create thousands of jobs nationwide. Solutions like opening the Keystone Pipeline could open an estimated 120,000 indirect jobs and reduce our dependence on oil from overseas. Read about my efforts to open to Keystone Pipeline.
Lower the debt. The President’s own economic experts say even a 1 percent increase in GDP can create almost one million jobs. We must make a commitment to decreasing the national debt. Read about my efforts to cut government spending.
To this end, nearly 30 bipartisan jobs bills already passed under the House Republican Plan for America’s Job Creators. They are now awaiting the Democrat-run Senate’s approval. You can track those bills here. Additionally, you can read my full strategy for job creators here and tell me how you think it stacks up.
We didn’t get into this situation overnight, and we will not get out of it overnight. But if we begin to move forward on these steps, I am confident that we will move closer to economic freedom.