How much was actually spent?
Approximately 800 million ( $862 million) USD was spent. The following table shows how exactly was it allocated:
Approximately 800 million ( $862 million) USD was spent. The following table shows how exactly was it allocated:
Here are the expected multipliers:
Success? Failure?
Let’s take the government spending as 800 million. The (overall) employment only increased by 2.4 to 3.2 million. To a certain extend we can say yes, the recovery plan did work as the unemployment rate will increase and many jobs would have been lost without this plan. However, the increase in employment did not please what was expected by American economists, and also the increase in employment is not sufficient.
The graph below shows the net change of employment in the private sector. You can see that immediately stopped the shedding of employment in the private sector, in fact, ever since the recovery act has been implemented, there has been an increase in jobs every single month for the past 11 months after the implementation of the Recovery act.
The graph below shows the net change of employment in the private sector. You can see that immediately stopped the shedding of employment in the private sector, in fact, ever since the recovery act has been implemented, there has been an increase in jobs every single month for the past 11 months after the implementation of the Recovery act.
Obama expected the stimulus plan to bring down unemployment to be below 6%. It is clearly evident from the graph above, that, it failed to achieve what’s been expected with the imposition of the stimulus plan. However, as I have said earlier, many more jobs would have been lost without the recovery plan and other fiscal policies, it’s been estimated by economists that unemployment would have reached over 11%, rather than 10.1%. If we’re speaking in terms of actual numbers of job losses, 12.4 millions of jobs would have been lost instead of 8.8 million.
With the Recovery Act implemented in 2009, you can see that the Recovery plan is essential to narrow down the gap between actual GDP and potential GDP. Also, GDP growth rate stopped decreasing after the recovery act has been implemented. This shows that the Recovery Act is necessary and successful, according to GDP.
This is where I got my statistics from:
http://www.americanprogress.org/issues/economy/news/2011/02/16/9078/accomplishments-of-the-recovery-act/
http://www.google.com/imgres?um=1&sa=N&rlz=1C1CHMO_en-GBMY558MY558&espvd=210&es_sm=93&biw=1280&bih=675&hl=zh-TW&tbm=isch&tbnid=oqaWgk6aD5N0LM%3A&imgrefurl=http%3A%2F%2Fglobaleconomicanalysis.blogspot.com%2F2011%2F10%2Fhypothetical-employment-and.html&docid=XluebbLW8EeDpM&imgurl=http%3A%2F%2F4.bp.blogspot.com%2F-a5IAsmifPMg%2FTpJo--Ws26I%2FAAAAAAAAMvQ%2FiNufD_FdEDc%2Fs1600%2Funemployment%25252Brate%25252B-%25252BObama%25252Bprojection.png&w=619&h=458&ei=1BkvU4-gDIGQrQf314DoBA&zoom=1&ved=0CFMQhBwwAA&iact=rc&dur=997&page=1&&ndsp=13
http://www.americanprogress.org/issues/economy/news/2011/02/16/9078/accomplishments-of-the-recovery-act/
http://www.google.com/imgres?um=1&sa=N&rlz=1C1CHMO_en-GBMY558MY558&espvd=210&es_sm=93&biw=1280&bih=675&hl=zh-TW&tbm=isch&tbnid=oqaWgk6aD5N0LM%3A&imgrefurl=http%3A%2F%2Fglobaleconomicanalysis.blogspot.com%2F2011%2F10%2Fhypothetical-employment-and.html&docid=XluebbLW8EeDpM&imgurl=http%3A%2F%2F4.bp.blogspot.com%2F-a5IAsmifPMg%2FTpJo--Ws26I%2FAAAAAAAAMvQ%2FiNufD_FdEDc%2Fs1600%2Funemployment%25252Brate%25252B-%25252BObama%25252Bprojection.png&w=619&h=458&ei=1BkvU4-gDIGQrQf314DoBA&zoom=1&ved=0CFMQhBwwAA&iact=rc&dur=997&page=1&&ndsp=13