In March Congress and the President enacted the American Recovery and Reinvestment Act, which committed $787 billion for a package of tax cuts and expenditures designed to stem the nation’s economic free-fall, funnel immediate aid to families and states in distress, and build a sound foundation for new economic growth.
Now at the half-year mark, with about 14 percent of the total spent, the evidence is accumulating that the recovery act has started changing the trajectory and depth of the economic decline for the better.
As Economic Policy Institute President Lawrence Mishel explained: “Some experts believe that we have already moved into a recovery and, while it’s too early to say whether that’s true, there’s one thing we know is true: If economic growth has resumed, it is solely because of the impact of the recovery package. Without it the economy would have contracted 3 or 4 percent instead of 1 percent in the second quarter, and another half to three-quarters of a million jobs would have been lost.”
A new report issued today, The Recovery Plan in Action, offers a detailed account of the progress and impact of the recovery act as a tonic for the nation’s economic ills. EPI’s research and policy director John Irons, and policy analyst Ethan Pollack report on the status of the recovery act, including the size, kinds, and impact of spending to date, along with projections of how and when the remaining tax cuts and investments included in the act will reach the economy and, once arrived, what their effect will be.
The report notes that the benefits of the recovery plan are likely to ramp up beginning in the fall as the composition of the program shifts to include a greater share of the kinds of investments that provide more impact per dollar.
“Careful tracking of the recovery program shows that it’s beginning to have an impact,” said Irons, “and that impact will grow as more of the program is implemented and takes hold through the coming fall and winter.”