How much did the economic stimulus help?

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The economic stimulus plan enacted with the leadership of President Barack Obama, Senate Majority Leader Harry Reid and then-House Speaker Nancy Pelosi did not end the Great Recession, but, as the following charts show, it did do some good.

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While the jobs recovery is encouraging, economists believe that it is necessary to create 90,000 to 260,000 new jobs per month just to keep up with the population increase.  That is why the unemployment rate hasn’t gone down.

The difference in the estimates of needed job growth is based on economists’ opinions as to how many unemployed people have dropped out of the labor force, and would come back in if there was a full employment economy.   These dropouts account for the fact that even though jobs are increasing (at a modest rate), the unemployment rate is flat.

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The current economic stimulus may be less stimulating than in earlier economic recoveries because many Americans are so deeply in debt that they use any extra money to pay down their debts, rather than buying goods and services and thereby stimulating the economy.

I think this would be a great time to embark on needed public works projects, which would put people to work and at the same time improve the overall productivity of the U.S. economy.

Putting things off is not going to make things any better.

Click on How many jobs are needed to keep the unemployment rate steady? for a report on on the Calculated Risk web log.

Click on The Impact of the Recovery Act, in a Few Easy Charts for a report (and the source of the second, third and fourth charts) on Jared Bernstein’s On the Economy web log.

Click on Did the ARRA Hire the Unemployed or Just Shift Jobs Around? for a report (and the source of the bottom two charts) on Mike Konczal’s Rortybomb web log.

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