CBO Report Shows the Stimulus Worked

One of the biggest lies in American politics today, repeated almost daily by conservative leaders, is that the stimulus Congress passed in early 2009 was an utter waste of money.

This charge has been repeated so often -- particularly by Fox News -- that a majority of Americans think it's true, according to polls. (Of course, Americans are also inclined to think the stimulus was a waste because the economy remains so poor.)

Now, leave aside the strange fact that the right can't say anything nice about the stimulus, when nearly 40 percent of its outlays were in the form of tax cuts, which are the supposed antidote to all economic woes.

No, what's truly troubling is that critics keep beating up on the stimulus despite a substantial body of evidence that this intervention did reduce unemployment and produce a better economy than we would have had in its absence.

The latest study on the stimulus comes from the Congressional Budget Office, which today released another of its ongoing reports on the effects of the American Recovery and Reinvestment Act (as required by the law).

The report acknowledges that estimating the effects of the stimulus is no easy thing and offers both a high and low estimate of the law's effect on the economy and unemployment.

The high estimate is that the stimulus lowered the unemployment rate by 1.8 percent in 2010 by creating or preserving an additional 4.7 million jobs and and 1.4 percent in 2011 by creating an additional 3.6 million jobs.

The low estimate is that the stimulus only ensured 900,000 jobs in 2010 and 600,000 jobs this year.

If we imagine that the reality is somewhere in between the high and low estimates, the stimulus must clearly be judged as a helpful policy intervention.

Critics from both the left and the right can debate whether the stimulus was the best policy, whether it was big enough, and whether Congress chose the ideal spending priorities. Both sides can state, correctly, that the stimulus did not succeed in jump starting a full-fledged economic recovery.

But what critics can't say is that the stimulus was a total waste of money.