Five years ago today, President Barack Obama signed the American Recovery and Reinvestment Act of 2009 – better known as “the stimulus” – into law.
It was about $750 billion worth of spending that was supposed to kick start an economic recovery and, as its supporters said, “save or create” 3.5 million jobs.
According to the nonpartisan Congressional Budget Office, the stimulus created somewhere between 500,000 and 3.3 million jobs.
“If you want a precise answer that no one can quibble with, you’re not going to get that,” says Jim Feyrer, an economics professor at Dartmouth College who has studied the stimulus.
He says he believes unemployment is lower than it would have been, but it is impossible to say how much lower, because there is not enough data. The world, Feyrer notes, is “too messy.”
In 2009, “the economy was in much worse shape at that point than we thought it was at that point,” says Gabriel Chodorow-Reich, a research associate at Harvard University who was an economist at the White House in 2009. And the economy continued to go downhill after the stimulus was passed.
Chodorow-Reich says many studies, including one he co-authored, have shown the stimulus had “a large impact on employment.”
But Feyrer says the biggest challenge of assessing how well the legislation worked is that we “don’t have what we call a counterfactual. We don’t know what the world would have looked like in the absence of passing a stimulus package.”
And that is something its critics continue to seize upon as President Obama asks congress to approve more money to improve infrastructure.
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