Fox News anchor Gregg Jarrett falsely claimed U.S. gross domestic product "contracted over the last three quarters" to suggest that the stimulus failed. In fact, GDP has increased for four consecutive quarters, and economists agree that GDP and employment levels are higher than they would have been without the stimulus.
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Jarrett falsely claims GDP "contracted over the last three quarters"
Jarrett claims GDP "contracted over the last three quarters" and asks "would yet another stimulus be a waste of taxpayer money?" During the August 30 edition of Fox News' Happening Now, Jarrett claimed that the economic recovery act "failed to keep unemployment under 8 percent" and that "GDP has not grown but decelerated -- actually contracted over the last three quarters." Jarrett went on to ask, "[W]ould yet another stimulus be a waste of taxpayer money?"
GDP has increased in each of the last four quarters
Bureau of Economic Analysis: GDP has grown for the last four quarters. In an August 27 report, the Bureau of Economic Analysis estimated that GDP increased by 3.7 percent in the first quarter of 2010 and 1.6 percent in the second quarter of 2010. According to the BEA, GDP has increased during each of the past four quarters.
Fox News itself has acknowledged as fact that the economy has grown for the last four quarters. An August 27 FoxNews.com article reported that "[t]he economy has grown for four straight quarters." After Jarrett falsely claimed that GDP "contracted," Douglas Holtz-Eakin, a former director of the Congressional Budget Office, said that "the economy is not going down, it's growing, it's growing slowly," adding that this was "not terribly surprising."
Independent and private analysts agree stimulus significantly raised GDP, employment
CEA: Recovery act raised GDP by at least 2.7 percent in the second quarter of 2010. In its fourth quarterly report on the American Recovery and Reinvestment Act of 2009, the Council of Economic Advisers (CEA) stated that "the ARRA has raised the level of GDP as of the second quarter of 2010, relative to what it otherwise would have been, by between 2.7 and 3.2 percent."
Independent analysts agree that recovery act significantly raised GDP. In its quarterly report, the CEA included figures from independent analyses that also credited the recovery act with increasing the GDP. Included in these figures is the estimate by the nonpartisan CBO, which estimated that the stimulus raised GDP "by between 1.7 percent and 4.5 percent." CEA included the following chart in its report:
CEA: Recovery act has raised employment "by between 2.5 and 3.6 million." In its fourth quarterly report on the ARRA, the CEA stated: "The CEA estimates that as of the second quarter of 2010, the ARRA has raised employment relative to what it otherwise would have been by between 2.5 and 3.6 million. These estimates are broadly consistent with the direct recipient reporting data available for 2010:Q1."
Independent analysts agree that recovery act significantly raised employment. In its quarterly report, the CEA included figures from independent analyses that also credited the recovery act with increasing employment:
Economists say stimulus helped economic recovery
WSJ: 70 percent of economists surveyed said stimulus helped. The Wall Street Journal reported on March 12 that 38 of the 54 economists it surveyed "said the American Recovery and Reinvestment Act boosted growth and mitigated job losses, while six said the legislation had a net negative effect."
ABC News: Most on panel of economists "think the economy would be worse" without the stimulus. ABC News reported on February 18 that "most" of the economists on its panel "think the economy would be worse today without the big aid package, which totaled $787 billion and was signed into law by President Obama on Feb. 17, 2009."
NABE: 83 percent say stimulus raised GDP. A February survey of 203 members of the National Association for Business Economics (NABE) found that "[e]ighty-three percent believe that GDP is currently higher than it would have been without the 2009 stimulus package (ARRA)."
USA Today: Surveyed economists said "stimulus package saved jobs." USA Today reported on January 25:
President Obama's stimulus package saved jobs -- but the government still needs to do more to breathe life into the economy, according to USA TODAY's quarterly survey of 50 economists.
Unemployment would have hit 10.8% -- higher than December's 10% rate -- without Obama's $787 billion stimulus program, according to the economists' median estimate. The difference would translate into another 1.2 million lost jobs.