In the current political climate, candidates are assailing potential voters with all sorts of claims about their opponents, ranging from the absurd — questioning birth credentials — to the fundamental — government budget deficits. Behind some of these claims are kernels of truth or legitimate disagreement; behind others, however, is political nonsense. We are subjected to flimsy argumentation that serves only to lower the level of discourse and blind voters to the most important issues.
One issue that has fallen victim to such politicking is President Obama’s stimulus package, or the American Recovery and Reinvestment Act (ARRA), passed in February 2009.
The Republican Party has chosen the stimulus as a base from which to attack Obama’s economic leadership. Their main contention is simply that the stimulus package did not work.
Citing the slow recovery, high unemployment rate and general sluggishness of the U.S. economy, Republican presidential candidate Gov. Mitt Romney has essayed, with some success, to paint the stimulus as failed economic policy, ignoring its original purpose — namely, to end the recession. But what, in fact, did the stimulus accomplish? A brief look at the facts of Obama’s hallmark economic achievement reveals that the ARRA was in fact a policy success, one that should be celebrated on both sides of the aisle rather than subjected to tired partisan politics. The issue is spelled out most clearly in the economic data.
First, the immediate effects. After the package was passed in February 2009, real quarterly output jumped by about 6 percent, the second biggest improvement in the past 25 years. The following quarter, the United States experienced positive real GDP growth for the first time since the financial crisis hit in 2008. Job losses similarly relented, with employment seeing its biggest improvement in 30 years. The Congressional Budget Office has estimated that the stimulus kept 3.3 million Americans at work. In fact, in four months Obama brought about the official end of the recession; ever since, the United States has simply been struggling with a sluggish recovery, which is the natural course for recessions sparked by financial crises.
We see then that the primary goal of the stimulus was accomplished; the recession was over. Fiscal stimulus during recessions is not a partisan issue; in 2008, every presidential candidate proposed a stimulus package. Romney’s was the largest. Only once Obama tried to pass his own stimulus did it suddenly become taboo within the ranks of American conservatives. In fact, Romney’s words may come back to haunt him. In a December 2008 piece for the National Review, Romney called for a stimulus remarkably similar to what Obama actually passed:
“On the spending front, infrastructure projects should be a high priority. But because infrastructure projects involve engineering, environmental studies, permitting and contracting, they can take a long time to actually boost the economy. Spending to refurbish and modernize our military equipment is urgently needed, and it has a more immediate impact on the economy. We should also invest to free us from our dependence on foreign oil, not by playing venture capitalist, but by funding basic research in renewables, material science, combustion, nuclear reprocessing, and the like. During the 2008 campaign, virtually every candidate agreed on the need for an ‘Apollo-like mission’ to achieve energy independence. Now is the time to start.”
In essence, Romney called for infrastructure spending, investment in renewable energy and tax cuts. Obama’s ARRA was one of the largest infrastructure investments in American history — a second New Deal. Obama chose to spend the money on transportation, including $8 billion on a new high-speed rail network and $7 billion to extend high-speed Internet service, instead of spending more on an already bloated military budget. The infrastructure spending also repaired roads, built bridges and restored national landmarks. Moreover, Obama single-handedly rejuvenated the clean energy sector, pouring $90 billion of government money into a smarter power grid, investments in renewable energy, green infrastructure and green manufacturing. In addition, Obama modernized the health care system by funding a nationwide switch to electronic record keeping, before rounding off this package with hundreds of billions of dollars of tax cuts to the middle class. Sounds like just what Romney had previously ordered.
It seems clear in retrospect that Obama’s stimulus should have in fact been bigger; any economic anemia we are currently witnessing would have benefited from an even greater infusion of government funds. But Republican opposition to Obama’s stimulus package was fierce. Then Speaker of the House Rep. Nancy Pelosi thought the president would not have been able to pass anything above $600 billion. In November 2008, 387 economists signed a letter that only called for a stimulus package of $300-400 billion. Therefore, that Obama managed to wrangle, at the current estimation, close to $830 billion of stimulus out of such a partisan Congress is quite a feat, by anyone’s standards. Any proclaimed failure of the stimulus to truly reboot the economy on account of inadequate size is due to Republican obstructionism.
There is a lot Republicans can take issue with concerning President Obama; but when it comes to the ARRA, the verdict is in. It worked. Let us move on to bigger problems.
_
Russell Bogue is a Viewpoint writer for The Cavalier Daily._
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