The Corner

Unemployment Rates: Promised vs. Actual

In 2009, President Obama promised that the American Recovery and Reinvestment Act would “create or save” 3.5 million jobs over the next two years and that the unemployment rate would not rise above 8.5 percent. By the end of 2010, he promised, unemployment would have dropped to 7.25 percent. Furthermore, White House economists forecast that without ARRA spending, the unemployment rate would increase from 7 percent to 8.8 percent. Unfortunately, the administration’s estimates were wrong by a vast margin.

This week’s chart compares unemployment estimates from the president’s 2010 Budget — which contains the original proposed estimates for the impact of the stimulus on unemployment — with actual unemployment rates from the Bureau of Labor Statistics.

The data show that since the enactment of ARRA in February 2009, unemployment has not approached previous unemployment levels again: it was 7.6 percent when Obama took office, it is 9.1 percent today. Unemployment peaked at 10.2 percent in October 2009, an amount significantly higher than the administration’s warning for what unemployment would be without the stimulus (8.8 percent).

The lesson: Beware of promises.

As the prospect of yet another increase in stimulus spending for the sake of job creation looms, we need to be reminded that sustainable job creation comes from the private sector. True “stimulus” legislation is that which creates a stable, low-regulatory regime that will enable businesses to hire workers in sustainable jobs — jobs that will last long after stimulus funds have run out.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Most Popular

Culture

No One Is Ever Woke Enough

Closing out the week: The Harper’s letter calling for freedom of expression demonstrates that no one is ever “woke” enough, and that any institution that tries to make peace with the perpetually aggrieved eventually becomes dysfunctional; the value of Hamilton as a litmus test of the limits of cancel ... Read More
Culture

No One Is Ever Woke Enough

Closing out the week: The Harper’s letter calling for freedom of expression demonstrates that no one is ever “woke” enough, and that any institution that tries to make peace with the perpetually aggrieved eventually becomes dysfunctional; the value of Hamilton as a litmus test of the limits of cancel ... Read More

Mel Gibson’s Beastmode

Late-period Mel Gibson is probably the best Mel Gibson; in film after film after film he plays ornery old bastards with such conviction that each successive outing feels like a personal trip to the confessional. He doesn’t need the money anymore, and most of these roles are in indie movies that pay very little ... Read More

Mel Gibson’s Beastmode

Late-period Mel Gibson is probably the best Mel Gibson; in film after film after film he plays ornery old bastards with such conviction that each successive outing feels like a personal trip to the confessional. He doesn’t need the money anymore, and most of these roles are in indie movies that pay very little ... Read More