The Stimulus Plan: Failure on Private Sector Employment

A Verdict on Obama’s “Stimulus” Plan

REPORT: The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled

We estimate the Act created/saved 450 thousand government-sector jobs and destroyed/forestalled one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to off set state revenue shortfalls and Medicaid increases (Fig. A) rather than boost private sector employment (e.g. Fig. B). The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.

And note that many of these government jobs are unionized, which union organizations automatically deduct money from paychecks.

Government jobs saved. Private jobs destroyed. This is what occurred from the money that was spent.

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