July 5, 2011
Stimulus = $278,000 per job
You know they're trying to hide something when they release a report on the Friday afternoon of a long holiday weekend.
[T]he White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama...reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.Of course, that would have removed the ability of bureaucrats and friends of "O" to skim off the top.In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.
ADDENDUM: There was a second part to this post that got "lost" in the interwebs. Honest, I included it first time around. Here it is:
Jake Tapper tweeted that the White House isn't happy with the way the report is being framed, quoting Liz Ozhorn, "a White House spokesman for the stimulus bill":
[T]he Weekly Standard report “is based on partial information and false analysis. The Recovery Act was more than a measure to create and save jobs; it was also an investment in American infrastructure, education and industries that are critical to America’s long-term success and an investment in the economic future of America’s working families. Thanks to the Recovery Act, 110 million working families received a tax cut through the Making Work Pay tax credit, over 110,000 small businesses received critical access to capital through $27 billion in small business loans and more than 75,000 projects were started nationwide to improve our infrastructure, jump-start emerging industries and spur local economic development. The nonpartisan CBO has confirmed that the Recovery Act delivered as promised, lowering the unemployment rate by as much as 2 percent, boosting GDP by as much as 4 percent and creating and saving as many as 3.6 million jobs."Countering this, Reuters blogger James Pethokoukis tongue-in-cheek tweeted "But what about multiplier effect?" (reference) .
UPDATE: Jim Geraghty notes that, taking the White House "corrective" into account, and using higher employment estimates, then it comes out to $185,000 per job. So much better! Geraghty also notes that the White House is following a new rounding standard:
Also note that the White House does some convenient rounding of their own. In their defense, they state, “The nonpartisan CBO has confirmed that the Recovery Act delivered as promised, lowering the unemployment rate by as much as 2 percent, boosting GDP by as much as 4 percent and creating and saving as many as 3.6 million jobs.”Actually, that stretches what the CBO actually said. Their report puts the maximum impact on the unemployment rate at 1.8 percent and as low as .6 percent, and that it boosted “(inflation-adjusted) gross domestic product (GDP) by between 1.1 percent and 3.1 percent.”
I'll stress it again: if it was all good, they wouldn't have released it on a Friday afternoon before the holiday weekend. It would have been a prime time speech on July 4th right before the fireworks!
I'll work for Obama for half of that.
Posted by: Patrick at July 5, 2011 12:33 PMThat outrageous amount of waste is the "optimistic" scenario. And progressives say the stimulus didn't go far enough.
Posted by: Dan at July 5, 2011 12:35 PMNice job on using a portion of this report and making sure you don't let the numbers get in the way of proving a point.
Posted by: David at July 5, 2011 1:30 PMDavid, as you'll see, I modified the post to include the White House rebuttal, which, as I explained, I originally included it (honest) and have put it as an ADDENDUM. I suspect I didn't save it (or it didn't autosave earlier today). The UPDATE is separate and was just added.
Posted by: Marc at July 5, 2011 2:02 PMI'll still work for Obama for half of $185,000!
As for the "jobs created or maintained", how many of those are permanent? Yeah, it's great that the money was used to build a skate park in Pawtucket (where are you Joe Biden?) but often those construction jobs are temporary. Someone has a job for 2 months, 6 months or a year. But then what?
Even in my own town, whole departments and programs were created with the one-time stimulus money. So what happens after a year? Either taxes go way up to cover the end of the stimulus or those people hired just a year earlier are now back on the unemployment line.
I'd love to see a report of the number of people who got a stimulus-related job and are now back on unemployment. Do those count in the 3.6 million jobs created or saved?
" then it comes out to $185,000 per job"
Oh! Well, that's okay, then ...
Seriously, that's like four jobs in the real world. Can we have our money back, please?
"Seriously, that's like four jobs in the real world."
Well, more like 2-3. Benefits are expensive, as are taxes. It usually costs 50% or more in benefits for an employee. So if you can hire someone for $40,000, it's going to cost about $60,000 a year.
Two $60,000 a year salary employees would eat up that $185,000.
Posted by: Patrick at July 5, 2011 4:36 PMThese numbers (neither set) dissuade me from what I think I know from following the news. A huge portion of the stimulus went into supporting, essentially failed, local governments. Guess what, public jobs are a burden on the private sector. To my mind, it is preserve the pediment and allow the column to crumble.
Perhaps these numbers are to convince me that, somehow, things are different in Colorado.
It is truly hard to believe that simply cutting a check to every taxpayer would not have been preferable. True, this stimulus would have been undirected. Still, I think it would have reached more corners of the economy. I think it is now generally believed that government efforts to combat the "great depression" not only failed, but acted to prolong it in the United States. As I understand it, most other economies pulled out of it years before we did.
The big financials, automakers and phony GE were "too big" to fail and they got their TARP bailout. The states and their public unions were "too bloated " to fail and they got "stimulus". The hard working stiffs (like us) paid for all of it. We are getting stimulated out of existence.
There's some serious irony in all the stimulus money that went to local government to save those police, fire, and teacher jobs. The cowards in local government had the power to solve their own problems all along yet they chose the easy road until the money ran out. Now they're doing what the should have done two years ago. Talk about wasted money.
Posted by: Max Diesel at July 6, 2011 6:44 AMHow much money was there total in TARP and stimulus? Wasn't it somewhere between $2-3 Trillion?
How about letting all the big firms fail, letting all the local governments fail and send a check to every mortgage holder in the country. How many mortgages are there? 23 million? That's about $85,000 per mortgage holder. What if they were able to knock $50,000 off every mortgage and pay 1 year rent for every renter, and 1 year rent for every homeless person? Sure, it's going to make the housing market go crazy again, but it might have been a better use of the money.
Right-Wing Media Return To Using "Bogus" Math To Attack Stimulus
mediamatters.org/research/201107050015
This also in, when I take the defense budget and divide it by the number of active military personnel I get $360,000 per person. And that's not even including special approprations for Afghanistan and Iraq. Quick, conservatives, enlist before the gravy-train ends!
Posted by: Russ at July 6, 2011 10:54 AM"Quick, conservatives, enlist before the gravy-train ends!"
Because we all know you liberals would never compromise your beliefs just to make a buck, right Russ.
As to your larger point, whether your accurate or not, in reality there are almost as many 'conservatives' that would love to see that pared down too.
"Because we all know you liberals would never compromise your beliefs just to make a buck, right Russ."
I didn't realize that military services was contrary to your beliefs. But you're welcome to your own beliefs on that one. You're just not welcome to your own beliefs on math!
Posted by: Russ at July 6, 2011 12:18 PMEliminate NASA or give it to Richard Branson, $19 Billion saved.
Cut the military. How much? Just 10% would save the country almost $79 Billion and we'd still have the best military in the world.
Wow, I just saved nearly $100 BIllion with two cuts!
I guess the only problem there is it's still less than 1% of the deficit.
Posted by: Patrick at July 6, 2011 12:51 PM"I guess the only problem there is it's still less than 1% of the deficit."
Um, and that you can't eat deficit reductions.
Posted by: Russ at July 6, 2011 1:03 PM$19 billion budget for NASA? That works out to more than $1 million per employee! Pull the kids out of camp and pack up for Cape Canaveral, space cadets!
Posted by: Russ at July 6, 2011 1:18 PM"I didn't realize that military services was contrary to your beliefs. But you're welcome to your own beliefs on that one. You're just not welcome to your own beliefs on math!"
What??? I was actually pointing out that, despite your lack of a cite for your numbers, conservatives would like to see the military budget cut too. Is that a problem for you Russ?
Posted by: Max Diesel at July 6, 2011 1:44 PM"Well, more like 2-3. Benefits are expensive,"
No, they're not! They're free/don't count towards compensation. Haven't you heard the public union flacks on the subject ...?
"That works out to more than $1 million per employee! Pull the kids out of camp and pack up for Cape Canaveral, space cadets!"
Yep, cut it. I don't believe there is any value to the NASA program that private business couldn't handle. I don't see the need for a government space agency.
"They're free/don't count towards compensation."
Oops, you're right. My bad.
Posted by: Patrick at July 6, 2011 9:15 PMRuss - I can assure you that I would cut the military much farther than you would.
Posted by: Dan at July 6, 2011 9:53 PMYeah, re military spending. That's one area where left and right libertarians have much more in common with each other than with the so-called centrists in either major party.
Posted by: Russ at July 7, 2011 10:35 AM