More bogus claims of jobs “created or saved” by “stimulus”
With the regime’s “Summer of Recovery” tour in full swing, we’re now hearing again how the “stimulus” has “saved or created” (or funded, whatever) about 3 million jobs. This blatant effort to call a turd fillet mignon has been debunked countless times by real economists who don’t work for the government. If the “stimulus” worked, don’t you think we (the dumbass taxpayers) would have seen it by now? Without the incessant blathering (and propaganda signage) from our dear comrade leader and his smartass VP?
This article (from NRO) points out that these specious claims of “created or saved” jobs are based on projections, not actual job counts. Furthermore these projections are predicated on seriously flawed assumptions of the effects of government “stimulus” spending.
The White House can repeat these “jobs saved or created” numbers as often as it wants; it won’t make them true. Consider this Business Week report on a study released today by the Council Of Economic Advisers:
The report says the stimulus has “saved or created” about 3 million jobs, and is moving toward a goal of 3.5 million jobs by the end of the year, according to an administration official speaking on condition of anonymity before the report’s release today.
As it turns out, when you unpack the numbers, you find that Romer and her team didn’t actually count how many people got a job thanks to the stimulus. Instead, the number is a projection that relies on the myth that a dollar of government spending creates up to 2.5 dollars of economic growth.
That’s strange. Robert Barro of Harvard University has estimated that, even in the best-case scenario, $1 of government spending will generate between $0.40 and $0.70 of economic growth, i.e., much less than the amount of growth that we would get if that dollar was invested privately. What’s more, if that dollar has previously been taxed out the economy, then the overall effect of $1 of government spending is a destruction of $1.10 of economic growth. Not exactly the rosy projections that Romer is touting today. (And Barro is not alone. Even the most optimistic projections of the economic effect of government spending never display such numbers. Never.)
Recovery.gov, which actually counts the number of jobs created (if in a very favorable light), only displays roughly 680,000 jobs, not 3 million. Why would the White House not up that number if in fact 3 million jobs had been created? Because they don’t have names and addresses to back up their gargantuan projections.
So, where are these jobs anyway? Certainly not in the private sector. According to the author, the existing jobs data provided by the government supports that most of the jobs “created or saved” have been government jobs.
I am about to release the third Stimulus Facts report based on Recovery.gov data, which show that four out of five jobs created were created in the public sector. Remember the promise made by Romer herself when the stimulus was passed, that the bill would create 3.5 million jobs in two years, mostly in the private sector? Almost two years later, 682,370 jobs were reported created, not 3 million, and over 510,000 of these were in the public sector.
You can call a turd fillet mignon over and over but in the end, it still looks, smells, and tastes like shit.