The White House stepped up defense of its stimulus plan on Wednesday, releasing a report that estimates the American Recovery and Reinvestment Act is responsible for creating or saving as many as 3.6 million jobs and adding up to 3.2 percentage points to the nation's GDP.
The Council of Economic Advisers Fourth Quarterly Report on the Economic Impact of the American Recovery and Reinvestment Act of 2009 said the recovery act had a significant economic impact on employment and economic growth primarily due to the government allocating $319 billion in "public investments" that allow businesses to attract private sector funding that leads to business innovation and job creation.
The report estimates that for every dollar the government invests in these public investment projects, private companies and outside investors are co-investing three times as much. The report also estimates that the Recovery Act has raised employment levels by between 2.5 and 3.6 million jobs.
"We've met the president's goal of saving or creating 3 million jobs two quarters earlier than anticipated," said Christina Romer, Chair of the Council of Economic Advisers.
The White House said two-thirds of the funds from these public investments were already obligated to projects, but only one-fourth has been paid out. A significant amount of the funds have been directed toward projects in clean energy, health information technology and road and infrastructure construction.
Romer explained that the money for these projects has been handed out more gradually because of the application process and the focused way in which the funds are intended to be used. She said the findings show the early benefits of using government seed money as leverage to bring in private corporations and investors on projects that will create permanent jobs and jumpstart business innovation.
In remarks this morning, Vice President Joe Biden said much more needed to be done to replace the 8 million jobs that were lost during the last recession, but he touted the recovery act's provisions as the first steps toward creating all new industries, not just rebuilding the industries that collapsed during the financial difficulties of the last decade.
"Once these companies see government jump into clean energy they are much more confident to jump in themselves," he said. "With more private investment, come more innovation and more jobs."
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