Biden’s Stimulus Speech: A Context Check

By Christopher Flavelle and Amanda Michel, ProPublica

Vice President Joe Biden marked the 200-day point of the stimulus package today with a speech at the Brookings Institution, where he spent nearly an hour ticking off its achievements so far. Among other things, Biden said some economists had given the $787 billion stimulus bill credit for creating 500,000 to 750,000 jobs and boosting the gross domestic product in the two most recent quarters.

The administration has benefitted from rosy economic numbers in recent weeks. The Federal Reserve, in minutes released Wednesday night, credited the stimulus with playing a role in stabilizing the economy. But any assessment of the stimulus, particularly when it comes to predicting jobs created or saved, relies on some economic guesswork.

Biden seemed to acknowledge that, saying it was “above my pay grade” to try to predict what the ultimate effect of the stimulus bill might be. His main point was that the White House had met or exceeded its goals made 100 days ago, when he said the administration would “accelerate” stimulus spending this summer.

We wondered whether the stimulus is meeting the larger goals set out when it passed in February. They include helping the neediest, preventing waste, fixing crumbling infrastructure and creating or saving jobs. Here’s some context for Biden’s remarks on those points:

Trajectory of the Economy

Biden was careful to refrain from giving the stimulus bill too much credit, but he did say it played a significant role in “changing the trajectory” of the economy toward recovery. “The Recovery Act isn’t the horse that’s carrying the whole sleigh,” he said, “but it’s pulling its weight.”

He cited a recent report by Goldman Sachs that credited the stimulus for boosting GDP in this quarter to a 3.3 percent annualized rate, up from gloomierestimates earlier.

“What nobody knows is what would have happened if we hadn’t done the (stimulus),” said Nigel Gault, chief U.S. economist at IHS Global Insight. “How much difference would it have made, for example, to state and local government spending if they hadn’t had transfers from the federal government? What would have happened to consumer spending if we hadn’t increased transfer payments to the unemployed, cut withholding taxes, and if we didn’t have the one-time payments to the seniors?”