Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job

[Denny Crane]

http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job
The stimulus is now causing the economy to shed jobs.

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.

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.

...

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.

...

The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.

 

[julius]

Have you guys ever noticed that the "liberals" on here rarely post political threads that back an opinion they have?

I bet 80% of the political threads are ones that support a conservative/right wing ideology.

not saying it's wrong (and oh yeah..they're not started by conservative people..it's just a happy coincidence), it's just funny.

It doesn't matter who is in office either, it seems the prolific thread starters are of a conservative ideology.

 

[barfo]

That is an unbelievably dishonest summary. It misquotes the numbers and lies about the conclusions. You should be ashamed of yourself for posting it, Denny.

Here are the actual conclusions of the study:

ARRA has raised the level of GDP as of the first quarter of 2011, relative to what it otherwise would have been, by between 2.3 and 3.2 percent.

ARRA has raised employment relative to what it otherwise would have been by between 2.4 and 3.6 million

barfo

 

[BLAZER PROPHET]

Have you guys ever noticed that the "liberals" on here rarely post political threads that back an opinion they have?

I bet 80% of the political threads are ones that support a conservative/right wing ideology.

not saying it's wrong (and oh yeah..they're not started by conservative people..it's just a happy coincidence), it's just funny.

It doesn't matter who is in office either, it seems the prolific thread starters are of a conservative ideology.

My recollection is when Bush was President it was the S2 liberals that made more threads bashing his administration and now that Obama is President the S2 conservatives are making more threads.

The moral of the story is that whoever controls the White House, the opposition will attack.

It's always been that way.

 

[Denny Crane]

That is an unbelievably dishonest summary. It misquotes the numbers and lies about the conclusions. You should be ashamed of yourself for posting it, Denny.

Here are the actual conclusions of the study:

ARRA has raised the level of GDP as of the first quarter of 2011, relative to what it otherwise would have been, by between 2.3 and 3.2 percent.

ARRA has raised employment relative to what it otherwise would have been by between 2.4 and 3.6 million

barfo

LOL

How did they come up with 2.4M jobs when there are 2m more unemployed now than when Obama took office.

 

[SlyPokerDog]

LOL

How did they come up with 2.4M jobs when there are 2m more unemployed now than when Obama took office.

Anchor babies.

 

[barfo]

LOL

How did they come up with 2.4M jobs when there are 2m more unemployed now than when Obama took office.

That's a silly question. If you fall out of a 4th story window, and I catch you half-way to the ground, you've still fallen 2 stories, but I've saved you from falling an additional two stories.

But don't worry, I won't catch you. Because I know you believe it is better for you to hit the ground.

barfo

 

[julius]

My recollection is when Bush was President it was the S2 liberals that made more threads bashing his administration and now that Obama is President the S2 conservatives are making more threads.

The moral of the story is that whoever controls the White House, the opposition will attack.

It's always been that way.

I don't think it was as much of a "see? I'm so right!"

some of that might be that at the end of Bush's last term, pretty much everyone was throwing him under the bus.

 

[Denny Crane]

That's a silly question. If you fall out of a 4th story window, and I catch you half-way to the ground, you've still fallen 2 stories, but I've saved you from falling an additional two stories.

But don't worry, I won't catch you. Because I know you believe it is better for you to hit the ground.

barfo

Liberals don't understand economics...

If we didn't spend the money, I wouldn't have been shoved out the window in the first place. The economy is shedding more jobs than it would have otherwise.

 

[MARIS61]

That's a silly question. If you fall out of a 4th story window, and I catch you half-way to the ground, you've still fallen 2 stories, but I've saved you from falling an additional two stories.

But don't worry, I won't catch you. Because I know you believe it is better for you to hit the ground.

barfo

True, so true.

You must spread some Reputation around before giving it to barfo again.

 

[barfo]

Liberals don't understand economics...

Apparently Libertarians don't understand logic.

If we didn't spend the money, I wouldn't have been shoved out the window in the first place.

In the analogy, you were already falling when I (ARRA) arrived on the scene. ARRA did not cause the economic crash. That happened several months before.

The economy is shedding more jobs than it would have otherwise.

That's not what the study says, nor does it follow from any data you've presented (ever). It is simply your religious belief, unencumbered by reality.

barfo

 

[Denny Crane]

To use your analogy, since you think you understand it...

The building was 2 stories and the fall was going to be 2 stories no matter what. Those shovel ready jobs were digging a hole 2 stories deep into the ground so the fall did end up being 4 stories.

 

[barfo]

To use your analogy, since you think you understand it...

The building was 2 stories and the fall was going to be 2 stories no matter what. Those shovel ready jobs were digging a hole 2 stories deep into the ground so the fall did end up being 4 stories.

We've covered this graph many times before, but I'll repeat it once more: both the with and without lines on that graph are projections. By the same person, presumably. Your misuse of this graph depends upon the assumption that while one of those predictions was in error, the other one was spot on. That's the kind of assumption you make when you care more about getting the conclusion you want than about getting the truth.

barfo

 

[jlprk]

Unemployment numbers are just the number of people who are on unemployment. They don't include people like me, I mean, they don't include people who have given up, or work part-time underemployed, or who hate the system and look for ways to evade it, or people who live under a bridge, or women who ho their husbands to avoid a job, or, people living off their savings between jobs, or people who would take a job if it walked up and slapped them in the face but who figure it's not worth the effort to instigate any applying, or people living off of an inheritance, or rich people who just don't have to work, or, well, I can think of a lot more.

 

[Denny Crane]

We've covered this graph many times before, but I'll repeat it once more: both the with and without lines on that graph are projections. By the same person, presumably. Your misuse of this graph depends upon the assumption that while one of those predictions was in error, the other one was spot on. That's the kind of assumption you make when you care more about getting the conclusion you want than about getting the truth.

barfo

The graph was provided by Obama's economic team/advisors.

It was part of his argument that the "stimulus" bill should be passed.

(From a) Jan. 9, 2009, report called "The Job Impact of the American Recovery and Reinvestment Plan" from Christina Romer, chairwoman of the president's Council of Economic Advisers, and Jared Bernstein, the vice president's top economic adviser.

Their report projected that the stimulus plan proposed by Obama would create between three and four million jobs by the end of 2010. The report also includes a graphic predicting unemployment rates with and without the stimulus. Without the stimulus (the baseline), unemployment was projected to hit about 8.5 percent in 2009 and then continue rising to a peak of about 9 percent in 2010. With the stimulus, they predicted the unemployment rate would peak at just under 8 percent in 2009.

 

[barfo]

The graph was provided by Obama's economic team/advisors.

It was part of his argument that the "stimulus" bill should be passed.

(From a) Jan. 9, 2009, report called "The Job Impact of the American Recovery and Reinvestment Plan" from Christina Romer, chairwoman of the president's Council of Economic Advisers, and Jared Bernstein, the vice president's top economic adviser.

Their report projected that the stimulus plan proposed by Obama would create between three and four million jobs by the end of 2010. The report also includes a graphic predicting unemployment rates with and without the stimulus. Without the stimulus (the baseline), unemployment was projected to hit about 8.5 percent in 2009 and then continue rising to a peak of about 9 percent in 2010. With the stimulus, they predicted the unemployment rate would peak at just under 8 percent in 2009.

You do understand what those words in bold mean, right?

If your argument was that Obama's team made lousy predictions in this case, I'd agree with that.

But you've been making a rather different argument, haven't you? An argument that is rather disingenuous, since I'm pretty sure you do know what the words in bold mean, and which curves on the graph they apply to.

barfo

 

[Denny Crane]

It's their job to be accurate in their predictions. Especially when they demanded we spend $800B or else.

By their predictions, they did dig that 2 story deep hole for the economy to fall.

You know GW Bush has the record for worst job creation (+3M jobs). Obama's going to take that honor and be the first to have negative job creation. As well as putting us in the most debt and running the biggest deficits.

 

[barfo]

It's their job to be accurate in their predictions. Especially when they demanded we spend $800B or else.

Unfortunately, the depth of the recession was difficult for anyone to predict.

By their predictions, they did dig that 2 story deep hole for the economy to fall.

There you go again. I just pointed out why that line of "reasoning" is faulty.

You know GW Bush has the record for worst job creation (+3M jobs).

Some say 1 million.

Obama's going to take that honor and be the first to have negative job creation.

If the economy doesn't recover, that will be true. But at the moment, we don't know.

As well as putting us in the most debt and running the biggest deficits.

Of course, that would be true of whoever took office in Jan 2009, so it's kind of a meaningless point.

barfo

 

[Denny Crane]

Unfortunately, we don't have people in the white house who are competent.

 

[barfo]

Unfortunately, we don't have people in the white house who are competent.

ARRA has raised the level of GDP as of the first quarter of 2011, relative to what it otherwise would have been, by between 2.3 and 3.2 percent.

barfo

 

[Denny Crane]

They couldn't predict unemployment would go up, but they can predict what effect the reckless spending had on GDP. Yeah, right.

 

[Denny Crane]

BTW

http://delong.typepad.com/sdj/2009/...t-of-stimulus-just-what-is-going-on-here.html

Cogan, Taylor, and Wieland claim that the stimulus isn't working--that it had no impact on second quarter GDP. Yet they also write:

John Cogan, John Taylor, and Volker Wieland: The Stimulus Didn’t Work - WSJ.com: Of the entire $787 billion stimulus package, only $4.5 billion went to federal purchases and $17.7 billion to state and local purchases in the second quarter. The growth improvement in the second quarter must have been largely due to factors other than the stimulus package...
​

Nobody disputes that if that federal spending hadn't been there federal spending would have been lower by $4.5 billion. Nobody disputes that if that aid to the states hadn't been there state spending would have been lower (or taxes higher) by $17.7 billion. That's $22 billion in extra spending in the second quarter... that's 0.6% of second quarter GDP... to boost second quarter GDP by 0.6%... that's a 2.4% per year boost to the annual GDP growth rate.

What is the Obama administration claiming as the effect in the second quarter of their expansionary fiscal policy? 2.3%.

(So where did the rest of the $787B go?)

 

[barfo]

They couldn't predict unemployment would go up, but they can predict what effect the reckless spending had on GDP. Yeah, right.

Yes, they do have a better idea of what happened than what will happen. Pretty much everyone (who isn't delusional) has the ability to predict the past more accurately than the future.

barfo

 

[barfo]

BTW

http://delong.typepad.com/sdj/2009/...t-of-stimulus-just-what-is-going-on-here.html

Cogan, Taylor, and Wieland claim that the stimulus isn't working--that it had no impact on second quarter GDP. Yet they also write:

John Cogan, John Taylor, and Volker Wieland: The Stimulus Didn’t Work - WSJ.com: Of the entire $787 billion stimulus package, only $4.5 billion went to federal purchases and $17.7 billion to state and local purchases in the second quarter. The growth improvement in the second quarter must have been largely due to factors other than the stimulus package...
​

Nobody disputes that if that federal spending hadn't been there federal spending would have been lower by $4.5 billion. Nobody disputes that if that aid to the states hadn't been there state spending would have been lower (or taxes higher) by $17.7 billion. That's $22 billion in extra spending in the second quarter... that's 0.6% of second quarter GDP... to boost second quarter GDP by 0.6%... that's a 2.4% per year boost to the annual GDP growth rate.

What is the Obama administration claiming as the effect in the second quarter of their expansionary fiscal policy? 2.3%.

(So where did the rest of the $787B go?)

In September 2009? It hadn't been spent yet. Duh.

barfo

 

[Denny Crane]

December 2010. The money was all spent by then.

The Obama Stimulus Impact? Zero

Recently released Commerce Department data show that of the $862 billion stimulus package, the change in government purchases at the federal level has, thus far, been extremely small. From the first quarter of 2009 through the third quarter of 2010, government purchases have increased by only 3% of the $862 billion ($24 billion). Infrastructure spending increased by an even smaller amount: $4 billion. In a $14 trillion economy, these amounts are immaterial.

The Commerce Department also provides data on ARRA grants to state and local governments and the amount of purchases by these governments. According to these data, state and local government purchases of goods and services did not increase at all in response to the large federal stimulus grants. These purchases have remained slightly below their pre-ARRA level since the fourth quarter of 2008.

...

The bottom-line is the federal government borrowed funds from the public, transferred these funds to state and local governments, who then used the funds mainly to reduce borrowing from the public. The net impact on aggregate economic activity is zero, regardless of the magnitude of the government purchases multiplier.

This behavior is a replay of the failed stimulus attempts of the 1970s. As Gramlich found in his work on the antirecession grants to state and local governments: "A large share of the [grant] money seems likely to pad the surpluses of state and local governments, in which case there are no obvious macrostabilization benefits."

The implication of our empirical research and Gramlich's is not that the stimulus of 2009 was too small, but rather that such countercyclical programs are inherently limited. The lesson is to beware of politicians proposing public works and other government purchases as a means to stimulate the economy. They did not work then and they are not working now.

Mr. Cogan, a senior fellow at the Hoover Institution, was deputy director of the Office of Management and Budget under President Ronald Reagan. Mr. Taylor, an economics professor at Stanford and a Hoover senior fellow, is the author of "Getting Off Track: How Government Actions and Interventions Caused, Prolonged and Worsened the Financial Crisis" (Hoover Press, 2009).

 

[julius]

George Bush had a stimulus package too, right? How much of an impact did that have?

 

[barfo]

December 2010. The money was all spent by then.

Not sure what you mean. What you quoted was from 2009.

The bottom-line is the federal government borrowed funds from the public, transferred these funds to state and local governments, who then used the funds mainly to reduce borrowing from the public. The net impact on aggregate economic activity is zero, regardless of the magnitude of the government purchases multiplier.

Very interesting, Denny. Now your argument is that the stimulus didn't matter because we would have borrowed and spent that money anyway? That's at odds with your previous arguments, but hey.... that's ok.

This behavior is a replay of the failed stimulus attempts of the 1970s. As Gramlich found in his work on the antirecession grants to state and local governments: "A large share of the [grant] money seems likely to pad the surpluses of state and local governments, in which case there are no obvious macrostabilization benefits."

Here's a real world clue for you and the writer: state and local governments do not have surpluses to pad these days. Premise = false. Conclusion = absurd.

The implication of our empirical research and Gramlich's is not that the stimulus of 2009 was too small, but rather that such countercyclical programs are inherently limited.

Wow. They are inherently limited. And the sky is blue on a sunny day, too. Of course they are inherently limited. If that weren't true, all recessions would be ended immediately by government stimulus.

barfo

 

[Denny Crane]

Comprehension problems barfo?

Gramlich's study was of the 1970s, not now. The most recent article was from December 2010.

Here's a real world clue for you: the economy isn't helped by govt. taking more money (by borrowing or taxing), but it is helped by it NOT taking more money.

Since the effect of the "stimulus" spending was a wash, the effect of the stimulus spending merely shows up on the balance sheet as more debt. Massively more debt.

By your logic, GW Bush saved 130M+ jobs. He's a frickin' hero!

 

[Denny Crane]

George Bush had a stimulus package too, right? How much of an impact did that have?

Nope.

 

[barfo]

Comprehension problems barfo?

No.

Gramlich's study was of the 1970s, not now.

I'm aware of that. Things were a little different back then, so the conclusions (assuming they were right in the first place) can't be blindly applied to the current situation, as your writer obviously tried to do.

The most recent article was from December 2010.

I'm sure there were more recent articles than that. Doesn't change the fact that you quoted a 2009 article about stimulus spending and asked where the rest of the money went.

Here's a real world clue for you: the economy isn't helped by govt. taking more money (by borrowing or taxing), but it is helped by it NOT taking more money.

That's not real world. That's your ideology. In the real world, there are short-term and long-term effects, positive and negative effects. It's not all black and white like you want it to be.

Since the effect of the "stimulus" spending was a wash, the effect of the stimulus spending merely shows up on the balance sheet as more debt. Massively more debt.

Earlier in this thread, the stimulus was a 2 story hole in the ground. Now it is a wash. Keep going in this direction, and you may bump into reality.

By your logic, GW Bush saved 130M+ jobs. He's a frickin' hero!

No idea what you mean by that, if anything.

barfo