Earlier this week, President Obama repeated his claim that, while the current economy isn’t perfect, at least “we yanked an economy out of what could have been a second Great Depression.”  To date, no one has contested the validity of this claim.  They should, because that’s not what the Obama Administration said when they took office.

In January 2009 the new Obama Administration issued its now-infamous report titled “The Job Impact of the American Recovery and Reinvestment Plan,” more commonly known as the “Romer/Bernstein Report” after the President and Vice President’s economists who authored it.  This report included estimates of what would  happen if the Administration’s stimulus plan was enacted, and what would happen if it wasn’t – presumably casting the U.S. into “another Great Depression.”  This chart displays the unemployment rates the Administration forecast in that January 2009 report if their stimulus plan passed (the “with stimulus” line), if their stimulus plan didn’t pass (the “without stimulus” line), and what actually happened:

Notice something important?  The unemployment rate the Administration in January 2009 predicted the U.S. would have now without their “yank(ing) the economy out of another Great Depression” (about 8 percent in the “without stimulus” line) is less than the current official U.S. unemployment rate (9.1 percent in May 2011).  Clearly, this data doesn’t support the President’s claim that the Administration “yanked the economy out of another Great Depression.”

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THEN (January 2009)

“Without stimulus” there would be about 134 million jobs in the U.S. by late 2010:

Source: Administration’s January 2009 Romer/Bernstein Report.

NOW (March 2011)

Without stimulus, there would have been 127 million jobs in the U.S. by late 2010:

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Washington Post, “Hidden workforce challenges domestic economic recovery,” March 15, 2011:

“Adding These Workers to February’s Jobless Rate Pushes It Up to 10.5 Percent”

“Overshadowing the nation’s economic recovery is not only the number of Americans who have lost their jobs, but also those who have stopped looking for new ones.  These workers are not counted in the Labor Department’s monthly unemployment rate, yet they say they are willing to work. Since the recession began, their numbers have grown by 30 percent, to more than 6.4 million, amounting to a hidden labor force that could stymie the turnaround. Adding these workers to February’s jobless rate pushes it up to 10.5 percent, well above the more commonly cited 8.9 percent rate.”

The following is a chart that has been regularly updated by Ways and Means Republicans, displaying the unemployment rate including unemployed people the Washington Post calls the “hidden labor force.” This same group was dubbed the “invisible unemployed” by Austan Goolsbee, the Chairman of President Obama’s Council of Economic Advisors, in an article he wrote in 2003 assailing the prior Administration.  According to Goolsbee, the “invisible unemployment rate” back then “probably pushed 8 percent” – well below the current level.

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The Economic Policy Institute (EPI), a union-funded organization, has estimated that the cuts contained in the CR would result in a loss of 994,000 jobs. This analysis is based on a highly simplified economic analysis that has repeatedly been demonstrated to be wildly inaccurate.

EPI’s Jobs Analysis – Even the White House Thinks It Is Wrong

• EPI’s track record on forecasting the impact of policies on job creation is even rejected by the White House.
  • For example, EPI estimates that the U.S.-Korea Trade Promotion Agreement would result in a loss of 159,000 jobs.
  • In contrast, the President has said repeatedly that this trade agreement will create 70,000 jobs.

Romer/Bernstein Analytical Methods – Wrong Before, Wrong Now

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For the last two years, Washington has ignored the plight of the American people and job creators. Instead, a Democratic-led Congress saddled them with policies that fostered uncertainty and eliminated jobs. Democrats’ continued pursuit of misguided economic policies and reckless spending have driven our debt to $14 trillion – a level that has cost the U.S. economy as many as 1 million jobs and that continues to undermine our nation’s economic recovery.

In January of 2009, Christina Romer and Jared Bernstein, then President Obama’s chief economic advisors, put together an analysis predicting that the Democrats’ stimulus package would “save or create” at least 3 million jobs by the end of 2010. Similarly, Romer and Bernstein claimed that passage of the stimulus package would keep the unemployment rate under 8 percent, falling to 7 percent by the end of 2010. But since that time, the unemployment rate has remained above 9 percent for 20 consecutive months, and there are 6.8 million fewer jobs than Romer and Bernstein predicted in their now-infamous report.

The arrival of 2011 has ended the era of the failed economic policies embraced by the Democratic Administration and advanced by unchecked Democratic Congressional Leaders. Instead, in the 112th Congress, the new Republican House Majority will pursue a contrasting agenda that creates the climate of certainty necessary to usher in a new era of private sector job creation. Congress sent a strong signal of that commitment in December by extending the current tax rates and preventing a massive tax hike on Americans and small businesses. If there is any hope of getting Americans back to work, Washington must get out of the way and let employers do what they do best and what America needs most – create jobs.

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Despite Vice-President Biden’s claim, the reality shows that, despite costing more than the administration expected, the stimulus still hasn’t created the jobs they promised.

CLAIM:  Democrats assert stimulus failed because Republicans kept it small.

Democrats repeatedly promised their massive 2009 stimulus plan would create over 3 million new jobs.  It hasn’t.  Instead, unemployment climbed to 10 percent as over 2 million more jobs were eliminated.  This weekend Vice President Biden took the extraordinary step of suggesting stimulus failed because Republicans made it “too small”:

TAPPER: Was the stimulus, in retrospect, too small?

BIDEN: Look, there’s a lot of people at the time argued it was too small. Actually, we…

TAPPER: A lot of people in your administration.

BIDEN: — yes. A lot of people in our administration, a lot of — I mean, you know, even some Republican economists and some Nobel laureates like Paul Krugman, who continues to argue it was too small. But, you know, there was a reality. In order to get what we got passed, we had to find Republican votes. And we found three — three. And we finally got it passed. So there is the reality of whether or not the Republicans are willing to play, whether or not the Republicans are just about repeal and repeat the old policies or they’re really wanting to do something. And I — I’m not — I’m not — you know…

TAPPER: So if you didn’t have Republicans that you had — if you didn’t have the legislative reality…

BIDEN: I think what…

TAPPER: — it would have been bigger?

BIDEN: I think it would have been bigger. I think it would have been bigger. In fact, what we offered was slightly bigger than that…

FACTS:  Democrats’ stimulus bill failed on its own merits, not because – at $862 billion or nearly $3,000 for every man, woman and child in the U.S. – it was “too small.”

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The number of jobs in the U.S. is currently 129.7 million.  So to justify the Administration’s current claim of 2.8 million jobs “created or saved” by stimulus, they need to also claim that without that stimulus there would be only 126.9 million jobs.  That’s exactly what they do, displayed as the “baseline projection” level in the graphic below from an April 14, 2010 report:

An inconvenient truth, at least for the Obama Administration, is that once upon a time, in their January 2009 Romer/Bernstein Report they told America that without their stimulus there would be 133.9 million jobs.  That’s right, in order to make it look like their stimulus has “created or saved” 2.8 million jobs, the Obama Administration first had to whack 7 million jobs from their previous estimates.

Here’s the math:

Step 1: How many jobs does the Administration currently claim there would be, without stimulus?

129.7 million Current number of U.S. jobs

-  2.8 million Jobs currently claimed to be “created or saved”

126.9 million Jobs the Administration currently claims there would be without stimulus

Step 2: How does that compare with the number of jobs the Administration used to say there would be without stimulus?

133.9 million January 2009 projection of jobs without stimulus

- 126.9 million Current claim of jobs without stimulus

= 7 million Jobs removed from the Administration “baseline” to justify their latest stimulus job creation claims

Here’s the story problem:

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Today, the State of Georgia welcomes Vice President Joe Biden for an update on the administration’s so-called stimulus bill. With national unemployment sitting today at 10%, and worse in Georgia, the White House’s credibility on stimulus success is dubious at best. Yet as proper manners would dictate, we owe the Vice President an opportunity to make his case.

President Obama tapped Mr. Biden to oversee the stimulus program because, as he put it, “nobody messes with Joe.”  While that may be so, as the Vice President has been traveling around the nation touting the various spending priorities of the stimulus bill, their alleged benefits have yet to materialize into jobs.  So if the Vice President is visiting to have us believe expanding broadband is how jobs are created or that we can “weatherize” our way back to prosperity, it may be Joe who is messing with Georgia.

It’s actually quite telling that the Vice President is visiting us to discuss the stimulus package on the same day that President Obama is setting off for Copenhagen to promote a job-killing National Energy Tax as a means to combat global warming. Because what was evident in the stimulus package, and has been reinforced through subsequent actions, is that this administration places a higher premium on its social goals than on putting people back to work.

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