Run: Facts! CBO Says Stimulus Created 1-2 Million Jobs in Q4

Although only 6% of the public believes that the stimulus has created jobs, private economic forecasters have concluded that the statute has created over 1 million jobs. Now, the Congressional Budget Office -- which provides nonpartisan fiscal analysis of government policy -- has reached a similar conclusion. According to a CBO report, the stimulus was quite successful in the last quarter of 2009:

CBO estimates that in the fourth quarter of calendar year 2009, ARRA added between 1.0 million and 2.1 million to the number of workers employed in the United States, and it increased the number of full-time-equivalent jobs by between 1.4 million and 3.0 million. Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.

The CBO estimates are larger than some earlier reports (particularly from the White House) because those reports were based on self-reporting by direct recipients of stimulus funding. Those numbers, however, do not include subcontractor hiring to complete projects demanded by stimulus recipients. The figures also do not include the "multiplier" effect of stimulus subsidies, job creation, etc. In other words, the earlier numbers do not account for new jobs created because people have more money to spend due to stimulus funds.

This is particularly good news for the Obama administration. Nevertheless, the overall unemployment rate must fall substantially before voters will have more optimism about the economy. Still, this news provides a factual counter to the empty rhetoric that the stimulus was irrelevant on the issue of jobs. Well, even Republicans who initially floated this argument quietly disagree with it today!

Query: If the stimulus had substantial success later in 2009 -- yet unemployment remains high -- does this validate Paul Krugman's argument that the stimulus should have been larger and that it should have included more items of direct spending and fewer tax cuts?