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and to set the stage for stronger future growth. Considerable evidence suggests
the Federal Government’s efforts to jump-start the economy were
successful. CEA estimates that the Recovery Act provided an important and
timely boost to GDP in 2009 and 2010, and led to the creation of about 6.4
million additional job-years through 2013—estimates that are in line with
those of CBO and of other forecasting groups. Other fiscal efforts enacted
subsequent to the Recovery Act brought the total to 8.8 million job-years.
The Administration’s actions have been guided by the notion that fiscal
support measures would only be needed for a temporary period, and this
view is being borne out. Most temporary measures to support the economy
expired in 2013, most notably the payroll tax cut. Businesses and households
are now in far better shape as a result of several years of deleveraging, and
private-sector growth has led the way since 2010. Although many challenges
linger, and supportive measures like emergency unemployment insurance
remain necessary given the unacceptably high rate of long-term unemployment,
the economy has the potential for even stronger growth in 2014.
Public policy, in particular public investment in areas like research,
infrastructure, and innovation, will continue to play an important role in the
economy. The President is proposing additional investments and reforms
in all of these areas. But, in these cases, investments are part of a longerterm,
sustained commitment to expanding the productive capacity of the
economy without the same need for immediate countercyclical support.
Overall, the Recovery Act and subsequent measures are one of the
main reasons why the U.S. economy was able to return to record levels of per
working-age population GDP within just over four years of the onset of the
recession and to bring the unemployment rate down by 0.8 percentage point
per year—when many other countries with systemic financial crises have not
seen their GDP per working-age population fully recover or their unemployment
rates start a sustained fall. In the longer run, the benefits of all of these
efforts will be more difficult to isolate from other simultaneous changes,
but they will be no less profound in terms of their cumulative impact on the
economic well-being of the Nation.
Appendix 1: Components of the Recovery
Act and Subsequent Fiscal Measures
Table 3-9 reports the actual budgetary impact of the Recovery Act
from its inception through the latest data available (the end of fiscal year
2013).
Table 3-10 reports the budgetary impact classified into the six
broad functional categories shown also in Figure 3-1: individual tax cuts,
The Economic Impact of the American Recovery and Reinvestment Act Five Years Later | 133