Tags: us | economy | Watchdog | Stimulus | Growth | Deficits

Watchdog: Stimulus Fueled Both Growth and Deficits

Friday, 27 May 2011 12:30 PM

The economic-stimulus package approved in 2009 fueled economic and jobs growth but also cost more than planned and helped widen already gaping deficits, according to the Congressional Budget Office (CBO), a non-partisan entity.

Specifically, the plan increased the number of people employed by between 1.2 million and 3.3 million, and lowered the unemployment rate by between 0.6 and 1.8 percentage points in the first quarter of 2011, The Wall Street Journal reports, citing CBO data.

It also raised gross domestic product (GDP) by up to 3.1 percent in the same period.

The stimulus package had its biggest impact in 2010, boosting GDP by as much as 4.6 percent in the second quarter of that year, while increasing employment by 1.4 million to 3.6 million in the third quarter.

jobs200geytyt.jpg
(Getty Images photo)
The price tag, however, exceeded what it was supposed to.

The CBO initially thought the program would cost $787 billion spread out from 2009 to 2019, but has now bumped that figure up to $830 billion.

Plus the positive effects are fading.

"CBO estimates that the employment effects began to wane at the end of 2010 and continued to do so in the first quarter of 2011."

The White House and Congressional Democrats tout the job-creating and growth figures while Republicans question the program's effectiveness and costs.

"It’s maybe had a little temporary effect," says former Minnesota governor and Republican presidential hopeful Tim Pawlenty, according to the Boston Globe.

"But it comes with big negative consequences down the road. It sets a really bad precedent."

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
The economic-stimulus package approved in 2009 fueled economic and jobs growth but also cost more than planned and helped widen already gaping deficits, according to the Congressional Budget Office (CBO), a non-partisan entity. Specifically, the plan increased the number...
us,economy,Watchdog,Stimulus,Growth,Deficits
256
2011-30-27
Friday, 27 May 2011 12:30 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved