The economic stimulus plan of 2009 is widely criticized as not working but it seems that it did work but is now slowing down. They say it didn’t create jobs but that is not right.

They say the government can only create government jobs. While it is true that government creates government jobs directly, it also plays a large role in creating private-sector jobs, say by contacting with a construction company to build a road or repair a school. Also those government workers and private-sector workers paid to do the work that the government funds, spend their money and that will further stimulate the private sector.

Why do I say this? Let’s look at the data. To make my point I’ll just look at private employment. Government employment is useless according to the critics. I disagree but I’ll leave that point alone right now. But it complicates the picture and gets into an argument that just distracts from my point. So private-sector only.

Monthly job numbers from the Bureau of Labor Statistics of the U.S. Department of Labor from January 2008 to as close to present as we can get are plotted here.

I downloaded the numbers from BLS and ran the numbers myself and produced a similar graph. My graph did not look nearly as nice as this one so I went ahead and used the one already published on the internet.

There are quite a few things the would influence the ecomomy beside that change in Presdential administrations. And one could argue that things would be better or worse if we had followed a different plan. Or one could argue that the TARP program passed in late 2008 was a part of this recovery. But the slow-down in job decline in early 2009 seem to suggest that stimulus plan seems to have worked but is now slowing down. Jobs are being added but at a slow pace.

The present jobs bill being promoted by President Obama should also stimulate job creation the same way. And there is a focus on fixing infrastrucure, things we need to do anyway. Some critics think this plan is a waste of time and money since the first stimulus didn’t work. It look to me like it probably worked but may not have been enough so it is well worth trying something similar.