Estimated Macroeconomic Impacts of the American Recovery and Reinvestment Act of 2009: A Letter to Honorable Charles Grassley
The Congressional Budget Office wrote to Senator Grassley on 2 March 2009:
CBO has developed a range of estimates of the effects of stimulus legislation on gross domestic product (GDP) and employment that encompasses a majority of economists’ views. By CBO’s estimation, in the short run ARRA will raise GDP and increase employment by adding to aggregate demand and thereby boosting the utilization of labor and capital that would otherwise be unused because the economy is in recession. Most of the budgetary effects of the legislation are estimated to occur over the next few years, and as those effects diminish, the short-run impact on the economy will fade.
Read the entire letter here as an Adobe PDF file.
David Passmore