CBO Analysis: Stimulus Package Created 1.6 Mil Jobs and Raised GDP by 3.2 Percent

[one...two...tree 2,762]

The Congressional Budget Office analyzed the stimulus package and found that the recovery efforts created as many as 1.6 million jobs, and raised the GDP by as many as 3.2 percentage points. But the CBO also took a closer look at what parts of the stimulus were the most effective. Ezra Klein posted the chart, and noted the results:

Leading the list is direct spending by the federal government, infrastructure aid to states and localities, other types of aid to states and localities, and transfer payments (think unemployment insurance and food stamps) to individuals. At the bottom of the list are corporate tax cuts, the new homeowner's tax credit and individual tax cuts.

Right. All of the various elements of the stimulus package did at least some good. In terms of returns on the dollar -- the proverbial bang for the buck -- government spending and aid to states did far better than cutting taxes.

This is entirely consistent with the evidence we saw before the vote on the recovery bill, so let's not forget what happened -- Republicans and conservative Dems scaled back infrastructure spending and aid to states, but kept the tax cuts.

And going forward, any additional recovery efforts will feature the exact same arguments, with the right insisting that government spending is ineffective compared to tax cuts -- reality be damned.

http://www.washingtonmonthly.com/

[Ban Hammer 14,665]

does this figure include jobs saved or created in fictitious congressional districts too?

[SMR 368]

The Congressional Budget Office analyzed the stimulus package and found that the recovery efforts created as many as 1.6 million jobs, and raised the GDP by as many as 3.2 percentage points. But the CBO also took a closer look at what parts of the stimulus were the most effective. Ezra Klein posted the chart, and noted the results:

Leading the list is direct spending by the federal government, infrastructure aid to states and localities, other types of aid to states and localities, and transfer payments (think unemployment insurance and food stamps) to individuals. At the bottom of the list are corporate tax cuts, the new homeowner's tax credit and individual tax cuts.

Right. All of the various elements of the stimulus package did at least some good. In terms of returns on the dollar -- the proverbial bang for the buck -- government spending and aid to states did far better than cutting taxes.

This is entirely consistent with the evidence we saw before the vote on the recovery bill, so let's not forget what happened -- Republicans and conservative Dems scaled back infrastructure spending and aid to states, but kept the tax cuts.

And going forward, any additional recovery efforts will feature the exact same arguments, with the right insisting that government spending is ineffective compared to tax cuts -- reality be damned.

http://www.washingtonmonthly.com/

What would have happened if we didn't do it? That's really the unanswerable question that makes this report presumptuous at best. How do you accurately measure economic growth and job growth from an individual tax cut?

The idea is that an individual tax cut increases consumer spending. But there is no way to measure what consumer spending would have been without the tax cut. If economic projections were reliable, we would have predicted the banking collapse, the stock market wouldn't be interesting, and Washington bureaucrats would have regulated us into averting the recession (maybe).

Think about it this way though. The report effectively covers the first 6 months of the stimulus. For $987 billion, you could hire nearly 40 million people (over 1/4 of American workers) to twiddle their thumbs for half a year with an effective annual salary of $50,000. And we got 1.6 million jobs. Of course you have to ask yourself what happens after 6 months, but a lot of the actual 1.6 million jobs were a lot shorter lived than that. I realize that simply paying people to twiddle their thumbs is a horrible idea, I'm just using it as a comparison for effectiveness.

We borrowed $1 trillion from China (and some other people) and our GDP went up by 3.2%. The US GDP is $14.2 Trillion. So we borrowed about 7% of our GDP to increase GDP by 3.2%. Is it any wonder that a plurality of Americans think they understand economics better than Obama?

All this report indicates is that the stimulus was horribly ineffective and that it's easier to count jobs created when the government builds a road than when we cut taxes on business and workers across the board.

[one...two...tree 2,762]

The table above comes from CBO's most recent report (pdf) on the stimulus, by way of Brad DeLong. What you're seeing -- and click on it to see it larger -- are estimates of the multipliers on various stimulus projects. Estimates, in other words, of how much stimulus the government gets for its dollars. Before we get into it, it's worth tossing this CFRB graph showing the composition of the stimulus package:

Leading the list of high-multiplier items is direct spending by the federal government, infrastructure aid to states and localities, other types of aid to states and localities, and transfer payments (think unemployment insurance and food stamps) to individuals. At the bottom of the list are corporate tax cuts, the new homeowner's tax credit and individual tax cuts.

Of course, of that list, the only policy we've rushed to expand is the homeowner's tax credit, which turns out to be among the two worst approaches if you're worried about stimulus.

http://voices.washingtonpost.com/ezra-klei...us_ordered.html

[Gary and Alla 3,696]

Oh Thank God. I can stop worrying now.

[Pooky 3,930]

Smoke and mirrors. Governments can talk of job creation all they like. Hell, I'm probably one of those being counted in this 1.6 million. Doesn't change the fact that I had to lose a job in the first place to count, does it? And I work in one of the main sectors the stimulus money should be going to. But there are places it is happening, and there are places it isn't.

As I said, smoke and mirrors. Nothing more.

[one...two...tree 2,762]

Smoke and mirrors. Governments can talk of job creation all they like. Hell, I'm probably one of those being counted in this 1.6 million. Doesn't change the fact that I had to lose a job in the first place to count, does it? And I work in one of the main sectors the stimulus money should be going to. But there are places it is happening, and there are places it isn't.

As I said, smoke and mirrors. Nothing more.

Uh, the CBO is considered reliable by both sides of the aisle...which is why both the Republicans and Democrats waited anxiously for the CBO reports on the cost of the Health Care Reform Bill. This report is not political spin...it's fact.

[Sofiyya 1,687]

Smoke and mirrors. Governments can talk of job creation all they like. Hell, I'm probably one of those being counted in this 1.6 million. Doesn't change the fact that I had to lose a job in the first place to count, does it? And I work in one of the main sectors the stimulus money should be going to. But there are places it is happening, and there are places it isn't.

As I said, smoke and mirrors. Nothing more.

Uh, the CBO is considered reliable by both sides of the aisle...which is why both the Republicans and Democrats waited anxiously for the CBO reports on the cost of the Health Care Reform Bill. This report is not political spin...it's fact.

Your kind of fact, Steven, but not everyone is a ** operative. Congress's poll numbers show it's not trustworthy, so depending on what they consider reliable is like depending on a flat tire. It won't get you very far.

[Pooky 3,930]

Smoke and mirrors. Governments can talk of job creation all they like. Hell, I'm probably one of those being counted in this 1.6 million. Doesn't change the fact that I had to lose a job in the first place to count, does it? And I work in one of the main sectors the stimulus money should be going to. But there are places it is happening, and there are places it isn't.

As I said, smoke and mirrors. Nothing more.

Uh, the CBO is considered reliable by both sides of the aisle...which is why both the Republicans and Democrats waited anxiously for the CBO reports on the cost of the Health Care Reform Bill. This report is not political spin...it's fact.

You totally missed the point, as usual.

Statistics are all well and good. But they're not substitute for first hand experience. I have it. The CBO don't.

[Sofiyya 1,687]

Smoke and mirrors. Governments can talk of job creation all they like. Hell, I'm probably one of those being counted in this 1.6 million. Doesn't change the fact that I had to lose a job in the first place to count, does it? And I work in one of the main sectors the stimulus money should be going to. But there are places it is happening, and there are places it isn't.

As I said, smoke and mirrors. Nothing more.

Uh, the CBO is considered reliable by both sides of the aisle...which is why both the Republicans and Democrats waited anxiously for the CBO reports on the cost of the Health Care Reform Bill. This report is not political spin...it's fact.

You totally missed the point, as usual.

Statistics are all well and good. But they're not substitute for first hand experience. I have it. The CBO don't.

The folks at the CBO have good, cushy jobs, and they want to keep them. They know what to say . . .

[웃 910]

12/02/09...

The economy has lost 7.3 million jobs since the recession began in December 2007, the most of any economic slump since the Great Depression.

http://www.bloomberg.com/apps/news?pid=206...exD_s&pos=1

[ready4ONE 5,400]

Smoke and mirrors. Governments can talk of job creation all they like. Hell, I'm probably one of those being counted in this 1.6 million. Doesn't change the fact that I had to lose a job in the first place to count, does it? And I work in one of the main sectors the stimulus money should be going to. But there are places it is happening, and there are places it isn't.

As I said, smoke and mirrors. Nothing more.

Uh, the CBO is considered reliable by both sides of the aisle...which is why both the Republicans and Democrats waited anxiously for the CBO reports on the cost of the Health Care Reform Bill. This report is not political spin...it's fact.

Your kind of fact, Steven, but not everyone is a ** operative. Congress's poll numbers show it's not trustworthy, so depending on what they consider reliable is like depending on a flat tire. It won't get you very far.

Be sure to tune in for the next exciting episode of:

Edited December 3, 2009 by ready4ONE

[one...two...tree 2,762]

[one...two...tree 2,762]

12/02/09...

The economy has lost 7.3 million jobs since the recession began in December 2007, the most of any economic slump since the Great Depression.

http://www.bloomberg.com/apps/news?pid=206...exD_s&pos=1

Which has absolutely nothing to do with the Stimulus Money or Obama's economic policies in general. You'd have to be wearing quite a thick blindfold not to see the trail of breadcrumbs leading up to this Recession. But continue, Joseph, to ignore reality.

Edited December 3, 2009 by Galt's gallstones

[Pooky 3,930]

12/02/09...

The economy has lost 7.3 million jobs since the recession began in December 2007, the most of any economic slump since the Great Depression.

http://www.bloomberg.com/apps/news?pid=206...exD_s&pos=1

Which has absolutely nothing to do with the Stimulus Money or Obama's economic policies in general. You'd have to be wearing quite a thick blindfold not to see the trail of breadcrumbs leading up to this Recession. But continue, Joseph, to ignore reality.

Your sordid imagery really reveals a lot about the way you think.

I hope you get the chance to be part of the President's job creation statistics. Then you may take off those rose-tinted glasses and see that all of the "job" figures are inter-related. The CBO's figures, and yes the general unemployment figures, are simply an artifice to make good copy.

The people on the receiving end just don't think it's funny