Stimulus Boosters, Listen Up: The CBO's Estimates Don't Tell You Whether Or Not the Stimulus Is Working


Sorry, Harry.

In response to a new CBO update on the effects of the stimulus, DemWarRoom, the twitter feed for Senate Democrats, has posted a triumphant note about the program's success: "Critics of the stimulus listen up: CBO estimates that it put 2.8 million ppl to work in 1st 3 months of 2010."  But it's stimulus boosters who ought to be paying more attention: Douglas Elmendorf, the head of the Congressional Budget Office, has stated plainly that his team's estimates do not measure real-world outputs (just inputs), that they do not serve as an independent check on its success or failure, and that if the stimulus had not created jobs, the CBO's figures would not reflect that fact. So no, sorry, try again: The CBO's updates do not actually confirm whether or not the stimulus is creating jobs.

NEXT: Reason Morning Links: Obama Sends Troops to Border, Jamaica Closes in on Drug Lord, Police Chiefs Warn About Immigration Bill

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “Critics of the stimulus listen up: CBO estimates that it put 2.8 million ppl to work in 1st 3 months of 2010.”

    Incumbents listen up: You’re out in November.

    1. Well, I like my representative, but everybody else’s has got to go!

      1. That toad underpass for the swamp near the interstate that he got built last year was really great.

      2. Conventional wisdom, perhaps; but this year, “Well, I like my representative as a person, but everybody has got to go!”

        1. I saw a poll that said 60% of those polled said they would NOT vote for their incumbant congress member. 60%. That’s new.

          1. “Incumbent” is the one where they can’t help pissing themselves, right?

      3. Meet the new boss…

        1. Probably. Still, everybody has got to go.

          1. Why do you hate toads? Does your sick little mind like when they get run over?

          2. better to have the devil you aren’t sure is a devil than the devil you know.

            1. That, and voting ’em all out reinforces their appreciation of serving at the “pleasure” of the people.

  2. begin obviousStatement

    I’m not sure which possibility is worse: that our overlords don’t understand the difference between model and reality, or that they do and just don’t care.

    end obviousStatement

    1. Harry Seldon might argue there is no difference…long live psychohistory 🙂

  3. I have to wonder if we were to actually do cost/benefit analysis on every government program, initiative, spending plan, etc. What percentage would show to be worth their costs? I’m guessing that would be a very low number. Of course for many programs you would have to factor in social costs and benefits and not just monetary, but I would say we would still show most of these things to be a waste of money. I used to have this boss who always would ask the same question whenever we were at a meeting and some new initiative or program was presented. How are we going to measure it’s effect so we know whether it’s worth the cost? Of course this was private sector, not public. We should be asking the same questions of our government initiatives as well. I believe Greenspan has actually made this point to his credit.

    1. It depends on WHOSE costs and benefits your calculating! Every person has a different calculation…these programs that you think are not worth it are VERY VERY worthit it to the right people…and those are the people with power.

      Only the incredibly naive think ANYONE in power cares about the cost/benefit of programs for you!

      1. In fact the fact that your cost/benefit is negative is treated as a GOOD thing for most of the people who support the program you don’t like.

        The utilitarian mindset is literally insane. You guys think that people really just can’t do a cost/benefit for “society” as good as you or don’t understand what cost/benefit is?! No they under-fucking-stand…they are taking your shit…grow up and start living in this fucking world!

        1. I think they don’t want any measurement of success done because they don’t want to be held accountable for their decisions. Also, they can keep these things alive indefinately by slamming critics on intent rather than results.

    2. We have done a cost-benefit analysis. The cost is a millions of dollars in spare change to the wealthy few and the benefit is 1000 votes per million dollars.

    3. Your question is based on the flawed assumption that government programs can be evaluated using CBA methods. Does cost-benefit work when evaluating a police force? The FDA? An F-16? The Education Department?

      Sure, we can formulate opinions on whether those things are worth having, but they aren’t really reducible to monetization… and neither are most of the services offered by the government.

      In fact, I’m inclined to believe that anything the government did do with a positive CBA should probably be done by the private sector instead.

  4. I used to have this boss who always would ask the same question whenever we were at a meeting and some new initiative or program was presented.

    I actually got rid of a weekly staff meeting by calculating the cost of the meeting per hour (I vaguely recall it came to something like $6K or $7K an hour), and asking if it was worth it. They decided they could hold them as-needed, rather every week.

    1. Most common mistake managers make, especially government ones, is assuming the time of their employees comes for free.

      1. Government employee time is free. From the manager’s perspective. If manager needs 10,000 envelopes stuffed he could hire out the scut work to Kinko’s for $300, but that $300 would come out of his discretionary budget. Much better to reassign staff, even at an equivalent rate of $300 an hour for an entire day because salary is already built in to the budget.

        1. It may not come out of his budget, but it is not free. He can pass the costs on up the chain. And that is one of the biggest reasons why government is so big. There is no incentive to properly size your staff.

          1. There is an incentive to properly size your staff. Your pay is based on the number of people you manage.

        2. That might be true but it’s equally true in corporate America.

          1. Starve the troll, please.

            1. Roger that.

              1. Are you registering assent, suggesting we fuck the troll in British slang, or both?

                1. Did Dan say something?

                  1. Nope.

              1. I could swear Dan said something. Huh. Oh, well, I gotta go take a shit.

                1. It was the wind.

                2. It was the wind.

          2. It happens in most big organizations, corporate and government. In the corporate world, there is a counter push back from the top though- the bottom line.

          3. Fortunately, bureaucratization destroys corporations faster than it does government, at least when the government doesn’t step in to bail them out.

  5. Never let the truth get in the way of a good story.

  6. I’m not sure which possibility is worse: that our overlords don’t understand the difference between model and reality, or that they do and just don’t care.

    Neither of those is as bad as it really is.

    They know, lie knowingly, and have their lies repeated knowingly. And the lie is always easily refutable. That’s how you can tell who’s on board and who’s not: who’ll suppress reason and dignity and join the chant, and who won’t?

    So no, sorry, try again

    Did they fail to reinforce the division of the loyal from “critics” who need to “listen up”?”critics” who, notably, are absent from the audience before whom they’re being commanded to “listen up”? No.

    1. “They know, lie knowingly, and have their lies repeated knowingly”

      Yeah repeated by the main stream media who have reached new heights of lap doggedness for this admisistration than any other in history.

      1. If you think that, Gilbert, you slept through the entire Bush administration.

  7. One schism in the libertarian groups revolves around IP law.

    It seems that some groups of libertarians fall on the side of “yes government has good reasons to protect IP for the biggest lwyered up companies that can afford to manipulate the political beuracracy in their favor. We all know the US government is bad at protecting individual property right like our paychecks, but at least they can help SONY by arresting 9 years that try to download music without paying MGM.

    The other group of libertarians is slightly more well read ont he issues and understands that the only reason our current government is interested in this bogus type of property right is becuase it empowers politicians to claim a rightful control over what people say/do or create and that this does nothing to create prosperity…or if it does that it is only by accident and for the most part the arbitrary 17 year rules are set up to increase the stability of the political establishment over self-determinism. This is why we see Monsanto controlled USDA agents doing military style raids on small busineesses with seed cleaning business and arrest dairy farmers who sell the wrong kind of cheese. I would love to see the IP nazis respond to some of the points made in this video

    Controversial discussion of IP

    these points have been made in writing many times by guys like Dr Kinsella, but the IP nazis tend not to enjoy reading very much

  8. This is off topic, but I’ve been wondering about this.

    I work for a multi-billion dollar electric utility based in the Midwest. If tornados in Florida knock out a chunk FPL’s infrastructure, my company (and others) will send down workers and equipment to help with the repairs. It’s known as mutual aid and it’s pretty common. It benefits everyone. It benefits the FPL customers by restoring their power sooner. It benefits FPL because without the aid from other companies, they’d be much slower with repairs, which has a negative impact on customer satisfaction. It also aids my company (and the others) because the cost of the workers and equipment is paid for by FPL, which means for the two weeks or so that our folks are down in Florida, they are not on our payroll, so O&M goes down.

    So how come, with all of the companies pumping oil out of the gulf, there isn’t a hint of anything equivalent to the mutual aid provided by utilities?

    1. got me…the whole oil pumping into the gulf thing is a mystery to me…I work in the enrgy industry and I thought these guys had contigency/emergency plans to cut the losses on how much oil they lose…I htouhgt there was a whole industry of contractors that they’d be able to throw money at to help fix promlebs like this…1,2,3,4,5,9 days I could believe…but I thought the leak would have definitely be stopped by now…seems like something fishy is happening to me.

      who benefits? companies with lots of existing US production. They can now freeze any new expansion of one of the biggest oil basins in the hemisphere…BP? this would appear to be bad for them…but they have liability capped well ahead of time…and this doesn’t mean they were sabotaged by one of the other groups with much to gain by freezing supply growth.

    2. So how come, with all of the companies pumping oil out of the gulf, there isn’t a hint of anything equivalent to the mutual aid provided by utilities?

      IMO, it’s about the impending lawsuits. Everybody knows that BP is going to get the living Beejesus sued out of them and I guess nobody wants a piece of that magic. Same reason we have Good Samaritan laws.

  9. So if the CBO numbers had turned out drastically “worse” (I put “worse” in quotes, since the premise of this blog entry is that there’s no way judge “good” from “bad”), such that stimulus critics could’ve seized on the CBO numbers to declare the stimulus an utter failure, you’d have poo-pooed those “stimulus = bad” declartions, right? RIIIIGHT.

  10. That’s really disappointed. As a dyed-in-the-wool liberal, I was happy to see the numbers, as it would improve Dems political fortunes. I’m sad to see the number is so meaningless. Why is that? Can the CBO not engage in outcomes research? Is that too costly? Sucks.

Please to post comments

Comments are closed.