The Case for the Stimulus: Oodles and Oodles of Jobs Saved, Created


Today is the first birthday of the American Recovery and Reinvestment Act, and The New York Times' David Leonhardt has a salute to the original $787 billion stimulus package:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody's Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Yet I'm guessing you don't think of the stimulus bill as a big success. You've read columns (by me, for example) complaining that it should have spent money more quickly. Or you've heard about the phantom ZIP code scandal: the fact that a government Web site mistakenly reported money being spent in nonexistent ZIP codes.

And many of the criticisms are valid. The program has had its flaws. But the attention they have received is wildly disproportionate to their importance. To hark back to another big government program, it's almost as if the lasting image of the lunar space program was Apollo 6, an unmanned 1968 mission that had engine problems, and not Apollo 11, the moon landing.

Another shovel-ready project.

The White House has been flogging Leohnardt's column, with press secretary Robert Gibbs offering a chilling nightmare vision of a non-stimulated world featuring two million additional Americans "who'd be unemployed right now."

I am more-than-temperamentally skeptical of anything coming out of Moody's, but IHS Global Insight has been fairly accurate in its assessments of the stimulus. And Leonhardt's a smart guy, and it's ARRA's first birthday, so why be a party pooper? If there's a case to be made for the stimulus, Leonhardt has made it.

But after a year of watching administration officials highball-then-lowball unemployment estimates (a practice Gibbs continues in the tweet quoted above), fictionalize job creation numbers, pull stats and locations out of thin air, and coin the absurd "saved or created" phrase (now trumped by the even lamer "funded"), it's going to take more than a column in the Times to make the stimulus look like anything other than Apollo 1.


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  1. No doubt that the stimulus has created or saved jobs but one thing I never hear is how many jobs it has cost.

    Personally I can say that my company has lost at least 50 jobs due to TARP and the stimulus bills.

  2. Fucking journalist! Those are picks and sledges.

  3. The picture is from one of the really great early Film Noir efforts. One of the best final shots in film history.

    Highly Highly Highly Recommend

  4. The funny thing is this: Let’s assume for the moment that moody’s is right.

    787 billion dollars. Divided by 2.5 million jobs. That’s still about 300,000 a job.

    1. Not all the $$ has been spent

      1. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs.

    2. I keep thinking that it would surely have been a more efficient use of the money just to give $300k each to 2,5 million unemployed people and let them do what they want with it.

      1. +1

        I’ve been telling my students this since last year. The original cost/benefit claim was $800 Billion for 4 Million jobs – $200,000 per job.

        If we’d put every unemployed person in the country in a lottery, drawn 4 million names and given them $200,000 tax free dollars, then think what would have happened.

        Some would have quickly blown the money on frivolous stuff – thereby putting those funds straight into circulation.

        Some would have paid off their mortgages – taking pressure off the credit market.

        Some would have bought new homes – helping the real estate and home building markets.

        Some would have bought new cars – helping the auto industry.

        Some would have started businesses, gone back to school, … whatever THEY thought was best and in the process helped many of the specific industries that the government claims they want to help.

        I’d still think the entire stimulus concept was bad policy, but it would have been “less bad” than what’s actually going on.

  5. Unemployment with the stimulus is higher than the administration predicted it would have been without the stimulus.

    So now the new claim is that, although the administration is incapable of seeing where the economy is going, that doesn’t stop them from changing it for the better? That has about as much credibility as “let the blind guy drive the car!”

    But people will still fall for it anyway. “Our priests stopped the sun from being eaten!” should have been discredited millenia ago, but people keep buying it.

  6. pull stats and locations out of thin air

    Not where they are being pulled from and they don’t smell like unicorn farts either.

  7. Apparently David Leonhardt considers spending $25 billion to send three men to the moon a wise investment.

    No further comments required.

    1. Oh c’mon, think about it.

      Maybe they deserved it?

      I can think of people who definitely deserve it.

      1. To the moon, Alice!

  8. I will take issue with the analogy. What was the opportunity cost of Apollo 11? What would all the NASA money have been invested in instead if left in the hands of the people?

    1. Oh, and if you cant answer my questions about the opportunity cost and prove your answers are correct, SHUT THE FUCK UP ABOUT THE APOLLO PROGRAM.

      Thank you.

      As an aside, a framed front/back page of the August 4, 1969 local newspaper with the first pictures of the moon landing is hanging on the wall in my house. I was born 11 days later. I love the Apollo program. I cant justify it though.

      1. I recall something about how we should be spending the money on po’ folk.

        1. Down a hole, in other words. Ralph Abernathy was at the Apollo 11 launch and said as much.

    2. What would all the NASA money have been invested in instead if left in the hands of the people?

      Not just the money. What would all of those engineers have created if they weren’t busy trying to win a race with the Russians?


      1. Better bombs to blast the Russians to Mars with? Just a WAG guess you know.

      2. Better porn delivery devices would be my guess.

        1. damn you, space race.

  9. If we can put a man on the moon, we can’t do anything else with that $25 billion 1969 dollars.

    1. Hahaha! Fuck You GI
      VC numbah 1

  10. Aw gee, isn’t that cute? They’re already (re)writing history of how Obama saved us all from the ravages of the Depression with his brave and selfless spending and how he won the war.

    When our grandchildren ask us if we remember the day when the Afghans attacked Pearl Harbor and how we rushed to join the fight against this evil, we can look them in the eye with pride and say “Yes, yes I do remember that day when Preisdent Obama led us all in a charge up San Juan Hill into a bloody battle that laid waste to AIG and the Bank of America once and for all. He was shouting, ‘Remember the bailouts!’ and we all cheered and cheered and then we all got drunk, knowing that his Universal Health Care would pay for everything, even for the gimpy leg I had before the war.”

  11. JW kind of stole my thunder, but…

    As if it took any kind of bravery and/or creative intellect to be handed a problem and come up with the solution of “Let’s throw a lot of money at it.”

  12. Awesome! Only $314,800 per job. Where do I sign up?

    1. Apply for a job in the public sector. They’s rollin the the cash these days.

  13. Leonhardt wrote of jobs calculated as created by the “stimulus”:, “…its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.”

    But what if another “independent agency” determines those estimates to be… liberal?

  14. The Congressional Budget Office is ? how do I put this ? Congressional. Not independent.

    1. Are you serious? Are you serious?

  15. Presumably the money spent came from somewhere. Does anyone know if the ~2 million jobs claim is just the gross number supported by the money, or the net number of jobs after taking into consideration the jobs that were lost or never came to be due to the diversion of capital?

    Put another way, have these econometricians taken into account “that which is seen, and that which is not seen”?

    1. Unless this is specifically stated to be the case, I would assume they are NOT counting the jobs lost because of the private sector money stolen adn poured into creating a bunch of makework gummint jobs.

    2. There is nothing to see of that which is unseen.

      Congress has a firm grasp of the obvious.

    3. Oh, come on. Play along. “Saved or created” means whatever you want it to mean when you say it.

      You’re either with us or with the terrorists.

  16. I was at the local DMV yesterday and noticed that 50% of the service windows were not used but the waiting room was 110%+ used. Only a 2 hour wait to get a new license plate…so I began to wonder if this is the pre-stimuled or post-stimuled condition of our DMV and asked the DMV supervisor if they had considered a 2nd shift, say 5:30-10 PM since their hours were 8:30AM to 5:00PM and a majority of people have day jobs. Her answer was…”that may be a good idea all we need is some of those STIMULE dollars”
    Mooney fo FREE!

    1. Who needs a 2nd shift? Make the DMV run from 11:30-8:00 and the productivity gain would be huge.

      1. My state mails my plates to me. I’ve waited in a DMV line once in 20 years. And we don’t have a state income tax. It…can…be…done!

        1. Some places give you a discount if you use the internet or mail. My county charges me EXTRA.

          However, our DMV is generally well staffed, rarely more than 15 minutes.

      2. Yeah, but just think of the premium pay needed to attract workers to a job with such crazy hours.

  17. to make the stimulus look like anything other than Apollo 1.


    1. Not funny

  18. The knock on the stimulus is two-fold:

    (1) Much of the money went to states to fund positions that were highly unlikely to be cut anyway.

    (2) No one seems to be asking what the long-term effect is. Sure, if you pump money into the economy, you can get it to overheat for awhile, but artificial stimulation is always followed by a leveraged contraction.

    1. 3) It cant possible achieve anything. Borrowing money merely transfers consumption, it cant create extra consumption, only different consumption.

      The only way jobs could have been “created and/or saved” is to shift the consumption from non-job creating to job creating. Other than sticking it under your mattress, there isnt a lot of non-job creating consumption. And I dont think china/japan/whoever was going to just sit on their money. It was going to get “invested” somewhere.

  19. I am more-than-temperamentally skeptical of anything coming out of Moody’s

    Thank you.

    Mark Zandi is a fucking mouthpiece for the White House’s policies.

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