President Obama's handpicked economic advisers waited until the Friday before the long Independence Day holiday weekend to release a report showing how bankrupt the economic "stimulus" was. It cost taxpayers $278,000 per added or saved job. As The Weekly Standard's Jeffrey Anderson noted, "(T)he government could have simply 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." Consider "outlandish" redefined.Here's Anderson:
When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.Too bad this has already been debunked. By Calvin Woodward of the AP:
The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council 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.
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.
Some Republican lawmakers critical of President Barack Obama's stimulus package are using grade-school arithmetic to size up costs and consequences of all that spending. The math is satisfyingly simple but highly misleading.Highly misleading? How?:
It goes like this: Divide the stimulus money spent so far by the estimated number of jobs saved or created. That produces a rather frightening figure on how much money taxpayers are spending for each job.
First, the naysayers' calculations ignore the value of the work produced.And:
Any cost-per-job figure pays not just for the worker, but for material, supplies and that worker's output — a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid.
Second, critics are counting the total cost of contracts that will fuel work for months or years and dividing that by the number of jobs produced only to date.
A construction project, for one, may only require a few engineers to get going, with the work force to swell as ground is broken and building accelerates.
Hundreds of such projects have been on the books, in which the full value of the contracts is already counted in the spending totals, but few or no jobs have been reported yet because the work is only getting started.
Third, the package approved by Congress is aimed at more than direct job creation, although employment was certainly central to its promotion and purpose.But why let math and logic get in the way when there's a highly misleading political point to be made?
Its features include money for research, training, plant equipment, extended unemployment benefits, credit assistance for businesses and more — spending meant to pay off over time but impossible to judge in a short-term job formula.
Nor do the estimates made Friday include indirect employment already created by the package — difficult if not impossible to measure.
By the way, this report also tripped up our very own Rick Santorum. Aside from Rick's huge math blunder, he echoes this point made by Anderson:
Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.But what was Rick's math blunder? From CNN:
During an appearance on CNN's "American Morning" Tuesday, Republican presidential candidate Rick Santorum claimed the 2009 stimulus package resulted in a loss of jobs. He cited a government report that he said previously stated 280 million jobs had been created by December and now says only 240 million jobs were created.Think Progress here's a transcript:
When pressed by CNN's Ali Velshi, who said there's a difference between a loss of jobs and creating fewer jobs than initially reported, Santorum remained firm on his position that the current administration has cost Americans' jobs. [emphasis added.]
SANTORUM: [Obama] passed a huge stimulus package that now we know, over the past two quarters, has actually cost American jobs, and that’s from the report of his own administration. They claimed in December that, uh, by the end of last year that they created 280 million jobs, and now they’re saying that they created only 240 million jobs. So look, in this, you’re talking about huge increases in spending.And did you see Rick's blunder? Thinkprogress again:
ALI VELSHI: Senator, I’m going to ask you to restate that, I’ve never heard that in my life. Tell me again, what you just said.
SANTORUM: If you look at the report that came out on Friday, the President’s own economic advisers said that the jobs stimulus package actually created fewer jobs over the period of time, since the uh, since the stimulus package went in place than it did when they reported back in December. In other words, there’s 30 million less jobs as a result of the stimulus package.
VELSHI: That’s not a loss of jobs, Senator, that’s a smaller aggregation of jobs. You can’t go on a campaign, a national campaign with this kind of math Senator. It’s just incorrect…I know you’ve got a lot of interviews to do. You might want to check that math.
Velshi is absolutely correct that Santorum needs to check his math, but he missed the huge problem with Santorum’s numbers. The entire American civilian labor force is about 153 million people. There are currently 13.9 million people unemployed. If the Obama administration had created 240 to 280 million jobs, the unemployment crisis would have been solved several times over, and America would have so many jobs that it would need to start employing workers from all over the world just to fill all the available positions.Ah, the joys of right wing math!