Thursday, November 27th, 2014

Checking the numbers on the economy

Council of Economic Advisers Chair Christina Romer holds up a copy of the 'Economic Report of the President' for 2010.
Council of Economic Advisers Chair Christina Romer holds up a copy of the 'Economic Report of the President' for 2010.

The Obama administration released an annual economic report on Feb. 11, 2010, in which it looked back at the previous year's events and summarized its policy goals for the future.

The report is "a blend of history, analysis and prescription," wrote Christina Romer, the chair of the president's Council of Economic Advisers, on the White House Web site. She also singled out the economic stimulus passed a year ago, the American Recovery and Reinvestment Act, for praise: "When the political rancor of the moment passes and dispassionate analysis is done by experts, I have no doubt that the American Recovery and Reinvestment Act of 2009 will be viewed as one of the great triumphs of timely, effective, countercyclical macroeconomic policy."

Republicans responded that the Obama administration is defending "job-killing policies." House Republican Leader John Boehner said on his Web site that the report praised the stimulus but "the very same report ... notes that unemployment will average 10 percent for the rest of the year. The Obama administration promised the trillion-dollar 'stimulus' would create jobs 'immediately' and keep joblessness below 8 percent."

We looked into Boehner's statement that the report says unemployment will "average 10 percent for the rest of the year." We rated that Mostly True. The report does that, but economists told us that the economy still needs to add jobs each month just to keep the unemployment rate from rising.

We previously looked into the Republican claim that Obama "promised" the stimulus would keep unemployment below 8 percent. We rated that statement Barely True. We found that administration economists projected an unemployment rate of below 8 percent, but they never called it a promise and included plenty of disclaimers saying the predictions had "significant margins of error" and the economic downturn was "unusual both in its fundamental causes and its severity."

As for claims in the economic report, we've examined two of them in recent months.

The report said that the stimulus created 1.5 million to 2 million jobs. We rated a similar statement from President Obama's State of the Union address. "Because of the steps we took, there are about 2 million Americans working right now who would otherwise be unemployed," he said. We rated that statement Half True. Economists can't say for sure what would have happened if the stimulus had not passed. While the number cited by Obama is backed up by the projections from his Council of Economic Advisers, it's on the high side of the projections from the CBO, and significantly higher than projections from several other economic forecasters.

Finally, we also looked at a statement from Obama that is repeated in the report, that he came into office "with a $1.3 trillion deficit before I had passed any law. ... We came in with $8 trillion worth of debt over the next decade." We rated that statement Mostly True. While there is a little room for interpretation when it comes to calculating deficits, the sources we consulted indicated Obama was on solid ground with his numbers.