The Congressional Budget Office, which is widely considered to be an authoritative, non-partisan source of objective economic analysis has issued its report on the stimulus plan's impact on the economy.
Its got lots of bad news!
At least for John McCain, the Tea addicts and everyone suffering from Obama derangement syndrome who have claimed since Day One that the Stimulus was a Democratic pay-off to unions, teachers and their base and would never work.
For Obama and the American people it actually has pretty good news.
Here is a link to the executive summary of the CBO findings:
http://cboblog.cbo.gov/...
The CBO's key points are:
- The stimulus put as many as 2.8 million people to work in the first three months of this year -- and raised GDP by as much as 4.2%.
- The stimulus lowered the unemployment rate by as much as 1.5% in the first quarter.
When the package was passed it specifically made the point that it was designed to provide immediate relief to individuals and businesses who were suffering from the abrupt dislocation of the general economy caused by the global financial crisis and to stimulate future overall economic growth in the mid and long term.
It was divided broadly into three sections of almost equal worth.
* The first component was tax cuts (36% of the total package) which included one of the largest across the board cuts in individual taxes in history - worth $145 billion - and $17 billion in tax relief for small businesses who were being devastated by the rapid fall-off in consumer demand.
* Second (about 25% of the total) was a series of elements aimed at assuring the basic "safety net" for individuals, companies, states and localities already in place was adequately funded. This included extension of unemployment benefits; expanded eligibility for food stamps for middle class families falling back into poverty; and aid to states facing budget shortfalls as tax revenues began to fall dramatically and medicaid liabilities increased.
* The third component (about 39% of the total) was for infrastructure projects including rebuilding highways, bridges, schools, mass transit facilities, and creating more renewable energy. This component was never sold as an immediate palliative.
Of course, the package could have been structured differently, but what is now beyond dispute is that just as TARP was effective in keeping the international financial system from self-destructing, the stimulus has been effective in halting the slide of the general economy and changing its direction towards growth.
Unfortunately, in much of the mainstream media and blog land, opinion replaces analysis, points of view substitute for facts, and ad hominem diatribes replace critical argument. Much of what is written about the economic matters represent the ideology of the writer, rather than any expertise in macro-economic theory or reality. In addition, the animus toward Obama - the root of which remains a bit of a mystery - colors (pardon the word chosen) the criticisms of Administration policies. It's pretty sad.
Fortunately, the CBO has done a public service and the naysayers can carp, but they have zero credibility as compared to knowledgeable, professional, unbiased experts who provide fact-based analysis.