Tuesday's Politico headline shouting "Mitt Romney camp to attack stimulus" may not be surprising, but it is more than a little ironic. After all, the 2009 American Recovery and Reinvestment Act worked; most economists - including the nonpartisan CBO and some of John McCain's own 2008 advisers - believe President Obama saved the American free-enterprise system from the abyss. But the inconvenient truths don't end there. As it turns out, Mitt Romney not only proposed his own stimulus program while governor of Massachusetts, but in January 2009 endorsed the broad outlines of what became the$787 billion stimulus program.
Once upon a time, as the record clearly shows, Mitt Romney was an advocate of government action to prime the economic pump. That starts with days as a "severely conservative" governor in Massachusetts from 2003 to 2007. As Salon recounted in "The Stimulus Plan Romney Forgot," Governor Romney hoped to improve the Bay State's dismal 47th ranking for job creation:
[T]he governor went big. In February 2005, Romney unveiled a sweeping $600 million stimulus package to kick-start the economy and create 20,000 jobs over five years...Most controversial: Romney wanted to spend $37 million to create new jobs by offering employers $30,000 for each new person they hired.Echoing the same language the Obama administration would later use in defense of its handling of the economy, spokesman Eric Fehrnstrom pitched the Romney stimulus in advance of Romney's January 2006 State of the State address:
"When we came into office, the state was losing jobs by the thousands every month," said Fehrnstrom at the time. "Today we are adding jobs, and the unemployment rate is almost a full point lower [than] it was when we took office. But we have more work to do."Running for President in 2008, Mitt Romney had more stimulating to do. As the U.S. economy began slipping into recession in late 2007, candidate Romney again proposed jump-starting the economy. As the New York Times reported on January 19, 2008 in "Romney Offers an Economic Stimulus Plan":
Mitt Romney offered an ambitious plan Friday to try to forestall a recession, proposing a $250 billion economic stimulus package with sweeteners for supply-side conservatives, older Americans and corporations.Then as now, Romney offered permanent tax cuts as the centerpiece of his plan. But when President-Elect Barack Obama was proposing a broader package of tax relief, infrastructure spending and aid to the states, Mitt Romney was on board. A month before the passage of final $787 billion stimulus program, Romney in January 2009 told CNN's Wolf Blitzer that he backed quick action by the incoming Obama White House:
Mr. Romney's proposal, outlined in a telephone interview during a campaign swing through Nevada, is grounded in new, permanent income tax reductions. It is also double the size of stimulus packages offered by two of the Democratic presidential candidates, Senators Hillary Rodham Clinton and Barack Obama, and far exceeds the $145 billion plan that President Bush suggested to Congress on Friday.
BLITZER: He's talking about a $750 billion economic stimulus package. He wants it to be passed as soon as possible. It's unclear if whether it can be passed before he's inaugurated on January 20th. What do you think about this proposal?
ROMNEY: Well, I frankly wish that the last Congress would have dealt with the stimulus issue and that the president could assign that before leaving office. I think there is need for economic stimulus. Americans have lost about $11 trillion in net worth. That translates into about $400 billion a year less spending that they'll be doing, and that's net of additional government programs like Medicaid and unemployment insurance. And government can help make that up in a very difficult time. And that's one of the reasons why I think a stimulus program is needed.
I'd move quickly. These are unusual times. But it has to be something which relieves pressure on middle-income families. I think a tax cut is necessary for them as well as for businesses that are growing. We'll be investing in infrastructure and in energy technologies. But let's not make this a Christmas tree of all of the favors for various politicians who have helped out the Obama campaign, giving them special projects.
That would be wrong. You'll see Republicans fight that tooth and nail if that happens. Let's do what's right for the economy, and let's not do what's a political expedient move.
Despite the fact that tax cuts made up over 35 percent of the final $840 billion ARRA tab, Republicans fought it tooth and nail anyway. And now, Mitt Romney backed by tens of millions of dollars from Karl Rove's American Crossroads is planning on running against the very kind of economic stimulus he once whole-heartedly supported. As Politico reported, Team Romney is going to repackage its "Obama made the economy worse" lie by focusing on the stimulus:
A senior campaign aide said Romney will argue that Obama has actually subtracted jobs: "Were these investments the best return on tax dollars, or given for ideological reasons, to donors, for political reasons? He spent $800 billion of everybody's money. How'd it work out?"As it turns out, it worked pretty well.
Sadly for the myth makers of Team Romney, the facts and the overwhelming consensus of economists - including John McCain's 2008 brain trust - prove otherwise. President Obama not only did not make the American economy worse; no thanks to obstructionist Republicans in Congress he saved the United States from "Great Depression 2.0" and put the nation on the path to recovery.
Start, for example, with the conclusions of the nonpartisan Congressional Budget Office (CBO). Despite Republican mythmaking that the American Recovery and Reinvestment Act (ARRA) "created zero jobs," in November the CBO reported that the stimulus added up to 2.4 million jobs and boosted GDP by as much as 1.9 points in the previous quarter. As The Hill explained, the CBO has found that "President Obama's 2009 stimulus package continues to benefit the struggling economy":
The agency said the measure raised gross domestic product by between 0.3 and 1.9 percent in the third quarter of 2011, which ended Sept. 30. The Commerce Department said Tuesday that GDP in that quarter was only 2 percent total...In February, the New York Times assessed the impact of the Obama stimulus and rebutted its Republican critics who looked instead to the UK for inspiration:
By CBO's numbers, the $800 billion stimulus added up to 0.9 million jobs in 2009, 3.3 million jobs in 2010 and 2.6 million jobs in 2011.
By comparison, despite criticism of its size and composition by both the right and the left, the stimulus by the Obama administration did add to jobs and growth. The nonpartisan Congressional Budget Office estimates it will have contributed at least 1.6 million jobs and perhaps as many as 8.4 million by 2013.
This month, the Booth School of Business at the University of Chicago surveyed a panel of economic experts of different political persuasions about the impact of the president's stimulus package: eight out of 10 said it had contributed to lower unemployment by the end of 2010. There was less consensus on whether its benefits would exceed its long-term costs, including higher taxes to pay for the spending. Still, when asked if the policy was worth it, four times as many economists agreed as disagreed.
Among those economists is Mark Zandi, who in 2008 served as an adviser to Republican John McCain. Federal intervention, he and Princeton economist Alan Blinder argued in August 2010, literally saved the United States from a second Great Depression. In "How the Great Recession Was Brought to an End," Blinder and Zandi's models confirmed the impact of the Obama recovery program and concluded that "laissez faire was not an option":
The effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 3.4%, holding the unemployment rate about 1½ percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls. These estimates of the fiscal impact are broadly consistent with those made by the CBO and the Obama administration.But their modeling also suggests that the totality of federal efforts to rescue the banking system dating back to the fall of 2008 prevented a catastrophic collapse:
We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. For example, we estimate that, without the government's response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8½ million jobs, and the nation would now be experiencing deflation.Even Douglas Holtz-Eakin, former head of the CBO and chief economic adviser to John McCain during the 2008 election, acknowledged the impact of the stimulus. Certainly no fan of either Barack Obama or the design of the ARRA, Holtz-Eakin told Ezra Klein that:
"The argument that the stimulus had zero impact and we shouldn't have done it is intellectually dishonest or wrong. If you throw a trillion dollars at the economy it has an impact, and we needed to do something."
Indeed we did. Luckily for the United States, Barack Obama, the man the Romney campaign claims "never managed anything" and "doesn't understand the economy" acted quickly to bring America back from the brink of disaster. And as his record shows, Mitt Romney supported Barack Obama on the need and general approach to priming the economic pump. That is, until he started running against him.