Tuesday, July 5, 2011

The Cost Of The Stimulus According to the White House

A number of writers have commented on the White House's Council of Economic Advisors 7th quarterly report about the effects of the stimulus that Obama persuaded Congress to pass at the start of his term.  And indeed, even Obama's handpicked economists, doing their best to make it sound like the stimulus was a good thing, claim that it created or saved somewhere between 2,392,000 and 3,586,000 jobs (Table 8).  (Other estimates are not as high.)  And at a cost of $666.3 billion.  At their most optimistic (and least likely) guess, it cost $185,805 per job saved or created.  At their least optimistic guess, based on some guesses as to the multiplier effect, that's $278,553 per job saved or created.

What do you think the effects would have been if they had taken that $666.3 billion and distributed as tax credits for buying American-made goods?  How many cars would it have sold?  How many houses?  How many washing machines?

1 comment:

Robin said...

Hopefully no one is fooled into thinking that there is anything concrete about the "jobs saved or created" numbers. There is no real world measure at all, there is only a back of the envelope calculation made by assuming that there was some multiplier based on the dollars flushed down the sewer.

The actual state of the economy shows suggestions that the faux stimulus did nothing and combined with the destructive policies of the admin, made things worse.