Republican House Speaker John Boehner committed an enormous gaffe yesterday according to a Washington Post article. Mr. Boehner claimed that:”Our unemployment rate has been higher than 8 per cent for more than 21 / 2 years, far above what the Obama administration promised with the ‘stimulus.'”
Actually, the stimulus did not promise to keep the unemployment rate below 8 per cent as Mr. Boehner would know if he ever looked at the administration’s discussion of its stimulus proposal at the time. The report claimed that the stimulus as proposed would create between 3-4 million jobs by the end of 2010. However, the bill passed by Congress was substantially smaller than the stimulus requested by the president. The expected effect would therefore be in the range of 2-3 million jobs.
However, the economy was in much worse shape than the administration recognised at the time. It expected the unemployment rate to peak at 9.0 per cent even without any stimulus. At the time, the economy was losing close to 700,000 jobs a month. The unemployment rate had already risen to 9.4 per cent by May when the first stimulus related checks were just going out the door.
The best evidence available shows that the stimulus worked almost exactly as planned, creating 2-3 million jobs. However, the economy needed 10-12 million. The Obama administration’s error was in underestimating the severity of the downturn, not overpromising for the benefits of the stimulus.
This is apparent to people who can read and know arithmetic. The Washington Post should have highlighted the fact that Mr. Boehner apparently either has difficulty with arithmetic or was deliberately trying to mislead the public.
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