The Price Of Hope

Greg Mankiw reports on the results of a new CBO analysis of the short- and long-term impacts of the recently enacted stimulus bill, or American Recovery and Reinvestment Act of 2009 (ARRA).

The conclusion of the CBO is, in short, that while ARRA may have a significant short term impact on GDP and employment using the more optimistic growth estimate, it will have little effect on the economy in the long-run:

On the employment side, the CBO estimates that the bill will create 1.2 to 3.3 million jobs by the end of 2010. However, this figure is expected to shrink to 0.3 to 0.7 million jobs by the end of 2012. Of this estimate, I wonder how many are due to the increase of the federal bureaucracy. Also, keep in mind that many of the administration's growth assumptions in its spending bill are based on the higher, more optimistic growth projections. It's good to see former Reagan employee Rosey Scenario now working for the Obama team.

Do you think this is a solid enough ROI on $787 billion? It is your money, after all...