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Podcast: The Recovery Act Creates Jobs and Boosts Economy

In this podcast we will discuss the latest information showing that the Recovery Act is creating jobs and boosting the economy.  I’m Shannon Spillane and I’m joined by Senior Policy Analyst Michael Leachman.

1.    Michael, let’s start by talking about the new report. Can you tell me about it?

Sure. The Congressional Budget Office, or CBO, issued the report.  It estimates that as of December 2009, the Recovery Act has saved or created between 1 million and 2.1 million jobs.

In other words, there were up to 2.1 million more jobs in the economy in December than there would have been without the Recovery Act.

2.    What else does the report tell us about workers and the economy?

The report also found that without the Recovery Act, many full-time workers would have been reduced to part-time status and fewer workers would have been working overtime.

CBO does another kind of job-creation count that factors in those extra work hours – on top of the jobs saved or created.  By this measure, the Recovery Act’s impact on jobs is even bigger.

3.    In January, posted jobs figures based on reports by some recipients of Recovery Act funds. These figures were lower than CBO’s figures. How can you explain the difference?  

The recipient reports only look at a portion of Recovery Act spending, while the CBO is looking at the impact of ALL Recovery Act spending. 

The recipient reports covered only about one in five Recovery Act dollars spent during the fourth quarter of 2009 and did not include some of the Recovery Act’s most effective job-creating provisions like extra food stamps and unemployment benefits, and money to help states avoid laying off teachers and police officers.  

As a result, the recipient reports do not provide a comprehensive estimate of the Recovery Act’s impact on employment in the United States. – the CBO report gives a much more complete picture. 

By the way, other leading economic forecasters, like Mark Zandi of Moody’s and MacroEconomic Advisors have – like CBO -- released comprehensive estimates of the impact of the Recovery Act as a whole. The findings of these forecasters are similar what CBO has produced. The bottom line is that the Recovery Act has saved us from a much deeper recession. 

Thanks for joining me, Michael.