Nightly News   |  February 17, 2010

Obama: Stimulus plan staved off catastrophe

President Barack Obama and congressional Democrats on Wednesday mounted a vigorous defense of the $787 billion stimulus package signed into effect exactly one year ago. NBC's Lisa Myers reports.

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>> maceda, thanks.

>>> now we switch our coverage back to washington tonight where one year ago today president barack obama signed the economic stimulus package into law, a plan he said was crucial to saving the economy and jobs. today he and democrats on capitol hill defended that record, while many others have a different view. our report tonight from nbc's lisa myers .

>> reporter: today the president said that the much-maligned stimulus package staved off economic catastrophe.

>> one year later, it is largely thanks to the recovery act that a second depression is no longer a possibility.

>> reporter: many economists agree that the $787 billion package of infrastructure spending, tax cuts and aid to states has created jobs and helped pull the economy out of a deep recession. three economic research firms estimate that 1.6 to 1.8 million jobs have been created so far, with more gains projected this year. and painful job losses have slowed dramatically. last january the economy was hemorrhaging jobs at a rate of 780,000 a month. that slowed to 20,000 last month. economist mark zandy who advises republicans and democrats says the stimulus was absolutely vital, but not perfect.

>> the stimulus was effective. it helped the economy. we are out of recession into recovery, but it wasn't as effective as it could have been. bang for the buck was not as large as it should have been.

>> reporter: the white house forecasted the stimulus would keep unemployment from going above 8%. instead, the jobless rate soared to 10.2% last fall and stood at 9.7% last month. economist kevin hassett says the costly package hurts in the long run.

>> the administration decided to give us a sugar high last year rather than fix something that was broken. the problem is that we still have to fix the broken things and now we don't have any money.

>> reporter: critics ridiculed some projects as wasteful. $1.6 million for free water taxi rides. $1 million to improve security on dinner cruises in eight cities. and studies about how honeybees learn and the sex drive of rats on hard drugs. the president acknowledged that despite progress, this doesn't feel like a recovery to millions of americans, so he is pushing to spend another $100 billion this year to try to create more jobs soon. lisa myers , nbc news, washington.

>>> still on the economy, a