Obama economic stimulus 2012

World Economic outlook - Obama economic stimulus 2012 : President Obama's economic stimulus is still creating jobs, lowering unemployment and boosting the economy, but the numbers have slowed to a trickle as nearly all of the money has been spent.

Tht's the prognosis from the Congressional Budget Office, which conducts quarterly reports on the mammoth, $831 billion package of spending increases and tax cuts passed in February 2009.

While CBO has previously estimated that the law created or saved between 700,000 and 3.6 million jobs, the new report details its lingering impact in the fourth quarter of 2011, nearly three years after its enactment.

When Obama signed the stimulus into law, he “claimed that it would ‘create or save’ up to 3.5 million jobs, and that ‘a new wave of innovation, activity and construction will be unleashed across America,” Investors.com recalled. “The stimulus, would, he promised, ‘ignite spending by businesses and consumers’ and bring ‘real and lasting change for generations to come.’”

Following is a synopsis of Investors.com’s assessment:

• Unemployment: The jobless rate is unchanged from February 2009 to January 2012. Both stood at 8.3 percent. Obama's economists had predicted that the stimulus would keep unemployment under 8 percent.
• Long-term unemployed: The number of workers who haven’t been able to find a job in 27 months or more has shot up 83 percent. They now number at 5.5 million.
• Civilian labor force: This segment has shrunk by 126,000. During recoveries of the past, the labor force rose an average of more than 3 million during similar time periods.
• Labor force participation: The share of adults in the labor force has dropped 3 percent, which Investors.com labels “also highly unusual in a recovery.” A lower participation rate makes the unemployment rate look better.
• Household income: Median annual household income is about 7 percent below its February 2009 level.
• National debt: The debt has risen $4.5 trillion, or 41 percent. “The latest Treasury figures put the national debt at $15.4 trillion, larger than the entire U.S. economy,” Investers.com noted.
• Deficits: For fiscal year 2009, the deficit totaled $1.4 trillion. The Obama administration's proposed deficit for 2012 is $1.3 trillion.
• Gross Domestic Product: Real GDP rose just 6 percent between the first quarter of 2009 and the fourth quarter of 2011.
• Consumer and business spending: Personal consumption has climbed 10 percent in the past three years, but companies continue to stockpile cash, with cash on hand up 27 percent since the first quarter of 2009.
• Stimulus price tag: The original cost estimate was $787 billion. Now the Congressional Budget Office says it will have cost $825 billion.

Investors.com’s conclusion: “Perhaps the best measure of the success or failure of the stimulus, however, is the fact that President Obama in his latest budget plan has called for still another round of stimulus spending, this time totaling $350 billion over the next four years, for what is labeled ‘short-term measures for jobs growth.’”

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