Tag Archives: Business

by Malcolm Evans

In November, it will have been 8 months since the 787 billion dollar recovery act was passed by Congress and signed into a law by President Obama. While 8 months is not an adequate amount of time to evaluate the largest recovery act in history, one can still inquire about the effects of the bill, the main question being: has the act created jobs? The answer depends who you ask and how they define a “job.” An article titled, Stimulus: Creating jobs or not attempts to provide clarity around this question. The article does a great job of summarizing the views of the White House, Republicans and state representatives. Essentially: the White House says yes, Republicans say no and state reps seem to be leaning toward the affirmative. Things aren’t so cut and dry of course, but in evaluating the effectiveness of the bailout in regards to job creation, it’s important to keep (at least) three things in mind. First, rather than concentrating on the absolute number of jobs that have been created, let us consider the rate of jobs losses and creations. In these regards, the Recovery Act has significantly slowed the rate of job losses. Specifically, the “number of jobs lost in the third quarter averaged 256,000 per month–two-thirds less than the country sustained at the beginning of the year.” Additionally, from a micro viewpoint, several state governments seem to believe that the stimulus is helping employ their residents. Confidence in the president and the long-term potential of his policies is a big driver of employment and the overall economy. Lastly, over half of the funds apportioned for the rescue plan haven’t been spent yet. More money spent = more jobs? Not exactly, but it will certainly help.