Before the Ryan budget plan became a hot topic in the presidential campaign, the stubbornly high jobless rate dominated. It remains Mitt Romney's key argument for why he should replace President Obama and the clearest sign that the U.S. economy hasn't recovered yet from the Great Recession.
"[President Obama's] policies have not worked," Romney said Aug. 3 in Colorado. He citied 41 straight months of an 8+ percent unemployment rate.
But Obama's policies haven't been a complete failure either, says Michael Grunwald, senior national correspondent at Time Magazine and author of the "The New New Deal. Among the president's accomplishments: the $800 billion American Recovery and Reinvestment Act, better known as the stimulus bill.
Appearing on The Daily Ticker, Grunwald debunked five myths associated with the $800 billion stimulus:
The stimulus didn't create jobs.
Grunwald says the plan created two to three million jobs. The quarter after it was passed in February 2009 "had the biggest jobs gain in 30 years." However, that still doesn't make up for the eight million jobs lost in the recession.
The stimulus was full of waste, pork and fraud.
Grunwald says investigators documented only about $10 million in losses through 2011, equivalent to about 0.001% of its total cost.
The stimulus should have been bigger.
Grunwald says the stimulus plan was 50% bigger than the New Deal during the Great Depression after adjusting for inflation. A larger stimulus would have created more jobs but politics prevented passage of an even bigger plan. Grunwald told The Daily Ticker, "It couldn't have been bigger. There were three Republicans in the Senate whose votes were absolutely necessary…and they said absolutely no more than $800 billion…and at least half a dozen Senate Democrats were drawing that same line in the sand."
Unlike the New Deal, the stimulus will leave no legacy.
Not true, says Grunwald. "The stimulus plan was the purest distillation of what Obama meant by change." It included $90 billion for clean energy, $27 billion for health IT to fund online medical records and the Race to the Top program to transform education.
The stimulus showed that Obama can't legislate.
Grunwald says the president made mistakes and miscalculated, such as announcing that the plan would drive unemployment down to under 8 percent. But ultimately Congress passed it. Should the president trumpet the stimulus in his campaign? "Even the president has stopped saying the word stimulus, says Grunwald. "It's become a dirty word."
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