Opponents of President Obama are very vocal in saying the Recovery Act of 2009 did not succeed or create ANY jobs. After last night’s speech by the President regarding his new American Jobs Act, that talk about the 2009 stimulus ratched up again.
The evidence actually shows the stimulus (and other stimulative measures, including those of the Fed) worked, but ended too soon, before the private sector was ready to walk on its own.
Take a look at the graph above.
The pattern in job growth reversed course soon after passage of the Recovery Act, and broke zero — net job growth — in March of 2010.
But that’s only half of what this simple graph shows. Another piece of information is even more important. As the stimulus fades, the positive trends begin to falter: both GDP and job growth slow significantly, and unemployment stagnates at a highly elevated level.
The message of this simple graph is itself very simple: the stimulus worked. It prevented recession from becoming depression.
Is this hard, kids?
(source info via Jared Bernstein)