The Stimulus is Working? – 2.3 Million more Unemployed Next Year than Forecast
Every time one of the liberal Obama-bots comes on the airwaves and says that the stimulus is working, I am quickly amazed at their lunacy.
If the stimulus was working the US unemployment rate would be dropping and people would be working. Unfortunately with the way government is spending borrowed money and interfering within our ’so-called free-market’ economy, (I call it so-called free, because it is anything but free.) I don’t see a true recovery where unemployment drops until the government begins to remove it’s ‘dead hand’ from the market and allow capitalism to work again… (Hint: This will not happen under liberal Democrats. Sorry to be so blunt.)
It seems the CBO is also predicting what I originally thought when I heard about the porkulus stimulus bill that was nothing more than a scam to fund liberal groups who supported the president… That unemployment rate will continue to rise despite the so-called stimulus.
Yesterday the Congressional Budget Office released their “summer update” publication, in which they update their baseline budget and economic projections for changes in the economy and legislation enacted so far this year. The Administration also released their “Mid-Session Review” publication, which makes similar updates for the President’s policy proposals.
Most of the press coverage focused on the updated budget deficit projections. I instead want to draw your attention to one component of the new CBO economic forecast.
We know of two big changes since CBO published their January baseline projection:
The economy in 2009 was worse than most professional forecasters projected at the beginning of this year before President Obama took office and launched his ambitious legislative agenda. A weaker economy has caused everyone to lower their estimates of employment and their estimates of this year’s recession, where “everyone” includes CBO, OMB, and major private forecasters. Forecasters also have lowered their estimates for 2010, in part because they are starting from a lower 2009 level.
There have been significant policy actions, the most notable of which was the $787 billion fiscal stimulus.
The new economic forecasts reflect both changes. The first makes the updated economic projections for 2009 and 2010 much worse than they were in January, and the second makes them somewhat better. (There is a vigorous debate about how much better.)
There is no disagreement, however, about the net directional effect of the two. CBO and OMB project a weaker economy in the remainder of 2009 and in 2010 than they projected at the beginning of this year before enactment of the stimulus.
How much weaker?
Based on CBO’s forecast for the average unemployment rate in calendar year 2010, 2.3 million fewer people will be employed on average next year than they projected in January.
For comparison, in July there were about 140 million people employed in the U.S.
Next year’s reality will depend heavily on when the economy turns up and how quickly growth returns. A new projection of fewer people employed next year should not surprise anyone. But 2.3 million is a big bad number.
An excellent Exit Question from ‘Hot Air‘, what exactly is the true unemployment numbers within the US?
Exit question: CBO’s projected average unemployment rate next year is 10.2 percent. How many jobs would we be talking about if they used the “real” unemployment rate, which includes discouraged workers and those who are working less than they’d like? According to the chairman of the Atlanta Federal Reserve, that one currently stands at … 16 percent and counting.
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