Wednesday may be the stimulus package's one-year anniversary, but Americans aren't in a party mood.
Only 6 percent believe the $787 billion American Recovery and Reinvestment Act (ARRA) created jobs, according to a recent CBS News/New York Times poll. Another 41 percent of Americans expect it will do so; 48 percent think it won't.
Until unemployment falls, the stimulus will be popularly viewed as a failure.
But that's not the best measure of ARRA's effectiveness, says Roger Aliaga-Diaz, a senior economist at Vanguard Group. “The right comparison is where we are versus where we’d be without the stimulus.”
And there, most economists are in agreement: The stimulus allowed the US to avoid an economic depression, where unemployment would have been higher and economic activity lower than where it is today.
The stimulus has “been a qualified success,” says Gus Faucher, director of macroeconomics for Moody's Economy.com, giving it “a solid B” grade. Its effect would have been larger if the stimulus had been larger, he notes.
The problem is that it's hard to quantify the success of such programs. How do you count something that didn't occur? “It’s not something you can observe,” Mr. Aliaga-Diaz says.
There's also an inherent lag between government spending and its economic effect, says Aliaga-Diaz. “From the moment it’s conceived to when it’s passed, there’s an implement lag, then an execution lag, and finally an effect lag in the economy. It takes time.”
The White House is well are of these problems. That explains why Vice President Biden, in praising the ARRA Wednesday, crediting it with creating or saving 2 million jobs in a report to President Obama made public on Recovery.gov, the government’s official website for Recovery Act spending.
That's a mushy number, based on reports by recipients of stimulus money and therefore difficult to calculate definitively.
And many Americans are looking for hard numbers.
“People aren’t going to feel good until they see job gains,” Mr. Faucher explains. “It’s the most tangible part of recovery.”
That upturn could still be a few months away because employers want to make sure an expansion is fully in place before they begin hiring.