Thomas Boston, director of research and innovation of Atlanta-based economic consulting firm EuQuant, agrees. “The stimulus plan is having an impact on the economy although it is weaker than we hoped. Perhaps the best way to judge its effect is to recognize that we are no longer comparing current economic conditions to that of the Great Depression,” say Boston, who is also a member of the BE Board of Economists. “We will never know what would have happened in the absence of an economic stimulus.”
Republican National Committee Chairman Michael Steele refutes claims that the Recovery Act is serving as a catalyst for economic rebound. “The White House has over the last few days and weeks claimed that they saved the economy. I quite frankly don’t know what they’ve saved it from, particularly given the fact that the anxiety and concern that most Americans have as recent polls have indicated is on the rise [and] that the struggle that small businesses and employers are going through is on the rise,” he maintains. “We’re still losing jobs. We’re still seeing unemployment ratchet up around the country.”
Steele points to Wakarusa, Indiana — a town with an unemployment rate of 16.8% and the location of the town hall Obama held last week — as an example of the scores of regions where the president is making “the same old broken promises about the stimulus and job creation and the jobs saved.” He further asserts: “I still don’t know how we measure that; no one’s ever told us. What we’ve seen put on the table so far has done nothing, has done very little to create jobs.”
Obama, however, announced last week the recovery act is currently providing $2.4 billion in grants to create the new generation of electric cars and that factories are “coming back to life.” The dollars will be split among roughly 50 projects in 25 states, with the biggest allocation going to Indiana and Michigan to create jobs in such industries as the automotive sector. In fact, the Department of Energy announced last week that General Motors, Ford, and Chrysler were awarded $241 million, $92.7 million, and $70 million, respectively, to produce electric drive batteries and components.
There continues to be much debate within the political, business and economic communities about the intent and effect of the Recovery Act. In fact, some have argued that the mammoth package was too small and that the Obama Administration should consider a second stimulus package to give the economy another jolt. In fact, that’s the position advocated last month by Laura Tyson, an outside adviser for the Obama administration and former chair of the President’s Council of Economic Advisors under President Bill Clinton.