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Despite Claims Stimulus “Is Working,” Latest Administration Projections Show Massive and Lasting Rise in Unemployment Following Stimulus

February 17, 2010

On the first anniversary of the signing of their so-called stimulus bill, Administration officials are fanning out across the country claiming stimulus is working.  As Vice President Biden put it: “One year later I am absolutely certain of one thing: I say this to the press, the Recovery Act is working.”

Meanwhile the chart below paints a very different picture. The blue line shows the unemployment rate the White House projected in early 2009 if their stimulus law passed. The red line shows the actual unemployment rate to date, plus the White House’s latest unemployment rate projections for the coming years. The record 16 million unemployed Americans know firsthand that unemployment surged following the passage of the 2009 stimulus law. But in a grim reminder of the long road ahead, the White House’s latest forecast anticipates unemployment rates through 2013 that will remain between 30% and 50% higher than the “old” predictions Democrats made in selling their $1 trillion stimulus bill. 

Sources: January 2009 Romer/Bernstein report, Department of Labor data and economic assumptions in the President’s FY 2011 Budget, Table S-13.