CEA Releases Report on the Economic Impact of the Recovery Act
The Council of Economic Advisers has just released their first quarterly report on the economic impact of the American Recovery and Reinvestment Act (ARRA).
The report’s findings are generally within the consensus range, although at the upper-end, from other analyses. Most notably, the report demonstrates the usefulness the fiscal stimulus had in boosting demand and growth in the short-term.
- Over $151 billion of the original $787 billion in stimulus funds has been distributed or gone to taxpayers and companies as tax reductions
- The ARRA has played a key role in moderating output decline and job loss
- The ARRA added roughly 2.3 percentage points to real GDP growth in the second quarter of 2009 and is likely to add even more in the third quarter
- CEA estimates that the stimulus has caused employment to be 1.1 million jobs higher as of the third quarter than it would have been without the fiscal stimulus (this is the uppermost range of other estimates, as the report also states that other analyses show that ARAA has added between 600,000 and 1.1 million to employment )
- Countries with larger fiscal stimulus measures “outperformed expectations relative to those adopting smaller packages”
- Stimulus funds “played a critical role in helping states facing large budget shortfalls because of the recession”