Last week, economists Timothy Conley and Bill Dupor concluded that the stimulus package (The American Recovery and Reinvestment Act of 2009 0r ARRA) shrank the economy even in the short run, destroying about 550,000 jobs overall. (The stimulus saved or created 450,000 government jobs, but that was more than offset by the fact that the stimulus wiped out a million private-sector jobs). As they noted in their study,
The stimulus package was criticized by many other economics professors, like Harvard University’s Jeffrey Miron, Robert Barro and Martin Feldstein. (Barro called it “the worst bill that has been put forward since the 1930s.” Feldstein, who also criticized it, served as an economic advisor to Presidents Obama and Reagan).
Nobel Laureates like Gary Becker have also criticized the stimulus package. Two hundred economists signed a statement publicly opposing the stimulus package in an ad published in The Washington Post and The New York Times.
While pushing the stimulus package through Congress, Obama cited claims by the Congressional Budget Office (CBO) that it would save jobs in the short run, while ignoring the CBO’s own finding that the stimulus will actually shrink the economy over the long run, by exploding the national debt and crowding out private investment. Obama also made the apocalyptic claim that the stimulus package was necessary to avert “irreversible decline,” but this claim was so incredible that it was not even peddled by his supporters in the media.
Much stimulus money has been wasted. It has gone to prisoners and dead people, wasteful welfare spending, abandoned bridges to nowhere and unnecessary government buildings. The stimulus subsidized foreign green jobs and wiped out jobs in America’s export sector.
The “’stimulus’ is not the road to economic recovery. It’s the problem, not the solution,” wrote Nobel Prize winning economist Vernon L. Smith.
