Tell Me When You Feel This (Stimulus That Is)

As we come up on the one year anniversary of the government's $787 billion stimulus program, I thought it might be fun to see what good, if any, it has done. The data below comes from two sources. The first is the claim by the Obama administration that the stimulus program has already created 30,000 jobs as outlined in an October 29, 2009 AP article by posted on Earthlink. The second set of data comes from several sources and tries to estimate how much of the stimulus money has already been spent. According to www.propubica.com, a source quoted in numerous other websites and blogs, the government has spent about $183 billion already with $120 billion in spending programs and $63 billion in tax cuts. A June 15, 2009 article on the Reasons magazine website by Jacob Sullom estimates that about one fourth of the entire package will be spent by the end of the year which comes out to about $197 billion dollars. Since the two sources are relatively close if you consider timing, year-to-date (propubica.com) vs. year end (Reason), lets use the $183 billion for our calculation.

Given these sources, let's do some very, very simple math: $183 billion has been spent to generate 30,000 jobs or $6.1 million has been spend to generate each job! If we assume that the tax cuts did not generate any jobs and use the $120 billion spending component, then we get a deal at about $4 million per job created. This is an atrocious waste of taxpayer money no matter how you do the math. Even if you are off a factor of ten in the job creation estimate, you are still looking at hundreds of thousands of dollars spent per job created. This is not job creation, this is just an unadulterated waste of valuable taxpayer resources.

The even sadder part of the whole deal is that the 30,000 estimate might be TOO HIGH. The whole purpose of the October 29 article referenced above is to review the job count data the Obama administration claimed was a legitimate estimate. In its review of government records, the AP found:

• Some groups that received stimulus money used it to pay raises for existing employees but reported saving jobs anyway.
• A Georgia day care center claimed that they saved 129 jobs with the stimulus money. Must be a very, very large day care center.
• A Texas contractor who kept 22 people on the payroll counted each employee four times inflating their jobs created number to 88.
• The water department in Palm Beach County, Florida hired 57 people but reported 114.
• A Colorado business claimed the stimulus created more than 4,200 jobs but the actual count was under 1,000.

Thus, just using just this small sample of reports that the AP reviewed shows that even the 30,000 is overinflated by more than ten percent before looking at any other sources. Pathetic returns no matter how you cut the data.

Two questions need to be asked:

1) If the entire $787 billion and the equally ineffective $700 billion TARP dollars had been given to each US household, each household would have received about $11,400. I contend this would have been a much better economic stimulator of the economy rather than banks that did nothing constructive with their TARP funds (see yesterday's post) and million dollars wasted per each job created. It certainly would have been fairer since these households will have to pay for these billions in future taxes.

2) Although there is no indication that the Obama administration artificially inflated the jobs creation number (if they were going to lie about the numbers, I assume they would have done a much bigger lie), what if they did? It reminds of the Nixon administration attempts to manipulate economic data back in the 60s and 70s to make his administration look better than it actually was. In either case, incompetence in reporting the numbers or lying about the actual numbers, how can we believe anything this administration tells us?