Dobbs misrepresents CBO projection of stimulus plan's effect on output

Written by Elbert Ventura

Published

Lou Dobbs falsely claimed on his radio show that “the Congressional Budget Office did a study on the president's so-called economic stimulus package. It says output would be increased somewhere between one and a half, three and a half percent.” In fact, the CBO estimated that output would increase “between 1.5 percent and 3.6 percent” in fiscal year 2009 alone and estimated that output would increase as a result of the stimulus package in subsequent years as well.

During the January 27 edition of his nationally syndicated radio show, Lou Dobbs falsely claimed that “the Congressional Budget Office did a study on the president's so-called economic stimulus package. It says output would be increased somewhere between one and a half, three and a half percent.” In fact, the CBO estimated that output would increase “between 1.5 percent and 3.6 percent” in fiscal year 2009 alone and estimated that output would increase as a result of the stimulus package in subsequent years as well.

In January 27 prepared testimony before the House Budget Committee, CBO director Douglas W. Elmendorf stated, “In CBO's judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation. With the legislation, CBO estimates, output would be between 1.3 percent and 3.6 percent higher at the end of this year, higher by a similar amount at the end of next year, and 0.5 percent to 1.4 percent higher at the end of 2011.”

From Elmendorf's prepared testimony:

In CBO's judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation. With the legislation, CBO estimates, output would be between 1.3 percent and 3.6 percent higher at the end of this year, higher by a similar amount at the end of next year, and 0.5 percent to 1.4 percent higher at the end of 2011. That additional production would raise the demand for workers, turning some part-time jobs into full-time jobs and boosting the number of people employed. According to CBO's estimates, the number of jobs would be between 0.8 million and 2.1 million higher at the end of this year, 1.2 million to 3.6 million higher at the end of next year, and 0.7 million to 2.1 million higher at the end of 2011.

From the January 27 edition of United Stations Radio Networks' The Lou Dobbs Show:

DOBBS: After one week in office, the president of the United States wants Congress to pass a trillion -- just about a trillion-dollar economic stimulus package -- a piece of legislation. No one has read it. No one knows what's in it. No one has seen an analysis of it -- an intelligent, profound analysis of it by the Congressional Budget Office, for example. So, here we go. Let's have Congress vote on it. That's the attitude.

[...]

DOBBS: You know, I was just going through the -- the Congressional Budget Office did a study on the president's so-called economic stimulus package. It says output would be increased somewhere between one and a half, three and a half percent. Do you realize that with a trillion dollars, we could put -- if we put a trillion dollars in the hands of everybody, that would be a 7 percent increase in the economy in one year? That could be done overnight. I mean, it's just crazy what these people are thinking about and calling themselves economists and public policy makers. It's scary.