The $800 billion American Recovery and Reinvestment Act that President Obama signed into law within weeks of taking office in 2009 has been criticized by some as wasteful government spending and by others as too little to be effective.
When it comes to keeping and creating employment, however, the package does appear to have done the job. A government report released this week suggests that the stimulus plan was responsible for the creation of 300,000 to 2 million additional jobs during the three months that ended December.
Further, projections show that as many as 1.5 million more people will have jobs during the first three months of 2012 because of the plan, according to analysis by the nonpartisan Congressional Budget Office (via the Center on Budget and Policy Priorities).
In addition to saving and creating jobs, the Recovery Act has increased the number of hours Americans worked. Without the stimulus, many full-time workers would have been reduced to part-time and there would have been less overtime work available.
The stimulus package was also responsible for lowering the nation's unemployment rate, which stood at 8.5 percent in December, from 0.2 percentage points to as much as 1.1 percentage points, according to CBO calculations.
The CBO is required by law to report its estimates on the number of jobs created by the Recovery Act.
The CBO's report also notes that the stimulus was responsible for boosting the nation's output of goods and services, known as gross domestic product, by 0.2 percent to 1.5 percent in the final months of 2011.
Last month, the Department of Commerce reported that its initial reading of fourth-quarter GDP stood at 2.8 percent. The agency will release an updated estimate, based on more complete data, next week.
The CBO report also found the stimulative effect on employment caused by the Recovery Act waned at the end of 2010 and continued to do so last year. Still, it says, the legislation will likely increase the number of jobs this year by 200,000 to 1.3 million.
The CBO estimates the act will also increase the nation's rising budget deficit by about $831 billion during the 10 years ending 2019.
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