The American Recovery and Reinvestment Act of 2009 Didn't Work

EXPERT COMMENTARY

The American Recovery and Reinvestment Act of 2009 Didn't Work

By Antony Davies, James R. Harrigan |
Dec 19, 2012

In early 2009, President Obama predicted that his American Recovery and Reinvestment Act would "jump-start our economy," "create new jobs," and provide "many years of economic growth." He claimed that this growth would "cut the deficit in half by the end of [his] first term in office" and put "our nation on sound fiscal footing." Terrified of a repeat of the Great Depression, Americans supported the president's plan for more than $1 trillion in new government spending.

The White House predicted that in 2012 the economy would grow by 4.6 percent, unemployment would drop to 6 percent, and the budget deficit would shrink to a mere 3.5 percent of GDP.

Well, here we are, and no one is talking about these predictions anymore. Real economic growth has stagnated at 2 percent, while official unemployment hovers near 8 percent and actual unemployment remains in the double-digits. Adding insult to injury, the only growth the stimulus spending has actually produced is a ballooning of the deficit to 8.5 percent of GDP. Only in Washington, D.C. could the idea of overspending our way out of a financial hole be taken seriously. It is almost as if, in addition to checking common sense when crossing the D.C. beltway, no one in government learns from past mistakes.

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