A Project of The Annenberg Public Policy Center

Did the Stimulus Create Jobs?

Yes, the stimulus legislation increased employment, despite false Republican claims to the contrary.


Summary

The economic stimulus package is a favorite target of Republican candidates and groups, but more than a few ads falsely claim it did not create or save any jobs. Some recent examples:

  • Republican House candidate Dan Debicella charges that Democratic Rep. Jim Himes failed Connecticut’s families because he voted for a “stimulus package that has done nothing to reduce unemployment.”
  • Rick Scott, the Republican candidate for governor in Florida, says Democrat Alex Sink “backed the failed stimulus bill, which created debt, not jobs.”
  • Similarly, Sink — who never served in Congress and didn’t vote on the bill — is attacked by the Republican Party of Florida in an ad that says the stimulus “gave us big debt and no jobs.”
  • Americans for Prosperity, a conservative group that does not have to disclose its donors, aired an ad against Democratic congressional candidate Denny Heck of Washington that claimed the “$787 billion stimulus … failed to save and create jobs.” The group has launched similar ads against other Democrats.
  • Kristi Noem, a Republican House candidate from South Dakota, calls the measure a “jobless stimulus.”

The truth is that the stimulus increased employment by between 1.4 million and 3.3 million people, compared with what employment would have been otherwise. That’s according to the nonpartisan Congressional Budget Office.

Analysis

The American Recovery and Reinvestment Act, more commonly known as the stimulus bill, has been featured in more than 130 TV ads this year, according to a database maintained by Kantar Media’s Campaign Media Analysis Group. In many of those ads, Republicans claim the bill has “failed” (a matter of opinion) or state (correctly) that unemployment has gone up since President Barack Obama signed the bill into law on Feb. 17, 2009. The national unemployment rate was 8.2 percent in February 2009, and it now stands at 9.6 percent, having peaked at 10.1 percent in October 2009.

But it’s just false to say that the stimulus created “no jobs” or “failed to save and create jobs” or “has done nothing to reduce unemployment” — or similar claims that the stimulus did not produce any jobs.

As we have written before, the nonpartisan Congressional Budget Office released a report in August that said the stimulus bill has “[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points” and “[i]ncreased the number of people employed by between 1.4 million and 3.3 million.”

Simply put, more people would be unemployed if not for the stimulus bill. The exact number of jobs created and saved is difficult to estimate, but nonpartisan economists say there’s no doubt that the number is positive.

Debicella for Congress TV Ad: “Rubber Stamp,” aired Sept. 9-10

Announcer: By rubber stamping the failed policies of the past two years, Jim Himes has failed Connecticut’s families. A stimulus package that has done nothing to reduce unemployment. A trillion dollar spending binge that leaves your family with more debt. Record new taxes that will hit our families on January first. Fairfield County families cannot afford a congressman who just rubber stamps a failed Washington agenda.

Dan Debicella: I’m Dan Debicella and I approve this message because like you, I believe there’s a better way.

Rick Scott for Governor TV Ad: “Wrong Solutions,” aired Sept. 14

Announcer: President Obama tricked us. Saying he’s in the mainstream, before becoming our most liberal president ever. And Alex Sink helped him do it.

Alex Sink: Barack Obama has the right message and the right solutions, for, uh, turning our economy around right here in Florida.

Announcer: The right solutions? Sink backed the government health care takeover, cutting 500 billion from Medicare. She backed the failed stimulus bill, which created debt, not jobs.

Alex Sink: Barack Obama has the right message and the right solutions.

Announcer: Wrong Solutions Alex.

Republican Party of Florida TV Ad: “Whatever it Takes,” aired Sept. 4-7

Announcer: Attention Florida voters – here are your official orders from Washington.

Barack Obama: I need you to raise money. I need you to walk, knock on doors. Whatever it takes to make sure that Alex Sink is the next governor of Florida.

Announcer: Maybe that’s because Sink supported Obama’s government takeover of health care. Or because Sink supported Obama’s trillion dollar stimulus bill – the one that gave us big debt and no jobs. What will Obama do to make sure liberal Alex Sink is the next governor of Florida?

Barack Obama: Whatever it takes.

Americans for Prosperity TV Ad: “The Truth About Heck,” aired Aug. 18-22

Multiple speakers: Our part of Washington state faces devastating unemployment. But Denny Heck is putting Nancy Pelosi’s agenda ahead of our needs. Heck supported the liberal $787 billion stimulus. That failed to save and create jobs. And Heck refused to oppose new energy taxes that will kill even more jobs here. Denny Heck is a 30-year political insider and a career politician. Heck’s agenda will hurt Washington state. Tell Denny Heck Washington state needs leadership, not more of Nancy Pelosi’s failed policies.

Noem for Congress TV Ad: “Serve,” aired Sept. 14-15

Announcer: Washington is on a spending spree. A jobless stimulus, expensive health care mandates, trillions in new debt and our children forced to pay it back.

Kristi Noem: The government is here to serve the people and not the other way around.

Announcer: Kristi Noem will go to Washington to rein in spending, balance the budget, help small businesses create jobs, and give South Dakota a voice again.

Kristi Noem: I’m Kristi Noem and I approve this message.

– by Joshua Goldman

Sources

H.R. 1. “American Recovery and Reinvestment Act of 2009.” GovTrack.us. accessed 27 Sep 2010.

Labor Force Statistics from the Current Population Survey, Unemployment Rate. Bureau of Labor Statistics. accessed 27 Sep 2010.

Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From April 2010 Through June 2010.” Congressional Budget Office. Aug 2010.