And not skipping a beat on the good news, the White House issued statements reinforcing its view when the program went into effect last Spring that it would take several months for the stimulus effects on the economy to kick-in. Meanwhile, Vice President Joe Biden also went on the offensive, saying the administration’s sweeping stimulus effort “is in fact working” despite public skepticism driven largely by steady Republican criticism. The American Recovery & Reinvestment Act was passed in January without a single Republican vote, despite President Obama’s bipartisan efforts. Biden noted, “The recovery act has played a significant role in changing the trajectory of our economy, and changing the conversation in this country. Instead of talking about the beginning of a depression, we are talking about the end of a recession.”
‘The recovery act isin fact working and has played a significant role in changing the trajectory of our economy, and changing the conversation in this country. Instead of talking about the beginning of a depression, we are talking about the end of a recession.’
Nearly 200 days into the effort, Biden delivered an upbeat report card about the $787 billion rescue effort that President Barack Obama pushed through Congress. He quoted estimates by private sector economists and independent analysts that the plan has created or saved 500,000 to 750,000 jobs so far. The White House is eager to promote signs of progress as the economy lumbers out of recession. Many economists warn that the unemployment rate will keep rising until at least 2Q 2010. Unemployent tends to be a lagging economic indicator, yet, it is by that measure — the loss or creation of jobs — by which many Americans decide whether economic life is getting better or not.
Obama’s Council of Economic Advisers on Sept. 10 will report an updated projection of the number of jobs created or saved because of the stimulus plan. Biden said he expected it will back up his predictions of 150,000 jobs in the first 100 days and another 600,000 formed or saved over the second 100 days of the act
Some economists say the 1% contraction in the second quarter would have been far worse, possibly as much as 3.2%, if not for the stimulus. “For the third quarter, economists at Goldman Sachs predict the U.S. economy will grow by 3.3%. ‘Without that extra stimulus, we would be somewhere around zero,’ said Jan Hatzius, chief U.S. economist for Goldman.”
