Job Creation and the CBO

Over at National Journal, Ronald Brownstein says stimulus critics must contend with the CBO's job-creation estimates:

Republicans who say that President Obama's stimulus plan hasn't created any jobs must ignore not only the Congressional Budget Office (whose latest estimate put the total as high as 2.1 million) but also the more immediate examples of Marco Rubio and Pat Toomey. [bold added]

Brownstein's comment is just an aside, but it's an important one to correct. The estimates he references aren't useful guides to the actual effects of the stimulus, because what the CBO does is measure inputs, not outputs. It then assumes, based on the input, that certain outputs result. By CBO director Doug Elmendorf's own admission, the office is "repeating the same exercises we [already] did rather than an independent check on it." As Elmendorf has confirmed, if the stimulus had not created the expected amount of jobs, the CBO's subsequent analysis would not have reflected the actual outcome.

Elsewhere in Reason, Veronique de Rugy wrote about the myth of the multiplier.