The Stimulus Is A Failure

[Drake Tungsten]

Farewell “Saved or Created”: Obama Administration Changes the Counting of Stimulus Jobs

The Obama administration has taken some heat and mockery for using the nebulous and non-economic term of jobs being “saved or created” by the $787 billion stimulus program.

So it’s gotten rid of it.

In a little-noticed December 18, 2009 memo from Office of Management and Budget director Peter Orszag the Obama administration is changing the way stimulus jobs are counted.

The memo, first noted by ProPublica, says that those receiving stimulus funds no longer have to say whether a job has been saved or created.

“Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars,” Orszag wrote.

In other words, if the project is being funded with stimulus dollars – even if the person worked at that company or organization before and will work the same place afterwards – that’s a stimulus job.

This change has not yet hit the Recovery.gov website, which lists 640,329 “Jobs Created/Saved as Reported by Recipients.”

http://blogs.abcnews.com/politicalpunch/2010/01/farewell-saved-or-created-obama-administration-changes-the-counting-of-stimulus-jobs.html

[ricketyclik]

Will someone please explain to me the second graph in post 519 (above, on this page)?

[notyoueither]

It looks like the total number of positions occupied by an employee over the entire US economy.

[Drake Tungsten]

Will someone please explain to me the second graph in post 519 (above, on this page)?

I guess you really are that stupid.

[ricketyclik]

Oh, OK, now I see, it's in thousands. The double thousands threw me.

Yes Drake, I must be, oh lovely one.

[Drake Tungsten]

I imagine you didn't understand this, either...

85,000 more jobs lost in December...

[ricketyclik]

Erm, let me see... No, I don't quite get it. Would you please explain it to me, you big, smart hunk of brain?

[SlowwHand]

On the positive side, cops aren't messing with tent cities much. Invest in Coleman.

[Drake Tungsten]

I'd rather not waste my time.

[Dinner]

Drake is likely to have an aneurysm over this one, but, the far right wing economic think tank The American Enterprise Institute has finally admitted that President Obama's stimulus bill has actually worked. In fact, the AEI estimates the stimulus bill has added approximately four percentage points to economic growth in 2009 thus helping fight the worst recession since the 1930's.

Oh Drake, when even your right wing cohorts are admitting the obvious then maybe you should give up the ghost.

AEI Says Stimulus Boosted Economy By 4%

This Is Martha Coakley's Most Desperate Hour
* January 6, 2010 | 6:01 pm

AEI has its economic outlook, by John Makin. Notice anything strange here?

We can expect 2010 to be a volatile year. This likelihood is underscored by looking back at 2008 and 2009. Two thousand eight was a highly volatile year leading up to the collapse of Lehman Brothers in September, which was followed by the risk of a total systemic meltdown. That sharp and obvious risk spike prompted massive policy responses that were simply the largest that central banks, with rate cuts and liquidity provision, and governments, with tax cuts and spending increases, could manage. The result--beginning in March 2009--was a linear rise in the prices of risky assets, the result of massive relief once the slip into a global depression had been averted and the acute phase of the crisis in the financial sector had passed.

The real economy also responded to the massive stimulus but remained heavily dependent on it. In the United States, growth during the second half of 2009 probably averaged about 3 percent. Absent temporary fiscal stimulus and inventory rebuilding, which taken together added about 4 percentage points to U.S. growth, the economy would have contracted at about a 1 percent annual rate during the second half of 2009.

The conservative line, of course, is that stimulus has utterly failed. To be sure, Makin is a credentialed economist, and therefore not in a position to be influencing the likes of Jim DeMint:

It is now clear that taking a trillion dollars out of the private economy and spending it on wasteful government programs has been an utter failure. Instead of creating real job growth, the stimulus has grown the burden of debt and increased the likelihood of high inflation and taxes. Since the beginning of this year, nearly 3.8 million Americans have lost their jobs. Unfortunately, instead of ending the failed stimulus, Washington continues to pursue a big government agenda of takeovers, spending and taxes that would further harm our economy."

http://www.tnr.com/blog/jonathan-chait/aei-says-stimulus-boosted-economy-4

The best part is much of the stimulus is long term projects (bridge construction, freeway expansions, etc) and tax cuts so the stimulus should continue to work for several years yet. Here's a second link:

http://www.delawareliberal.net/2010/01/07/american-enterprise-institute-stimulus-worked/

[Dinner]

Oh, and if you don't like those "leftist" groups' reporting then here is "The Next Right" which, if the name doesn't give you a clue, is a right wing source.

http://www.thenextright.com/john-smith/aei-obamas-stimulus-plan-worked-averted-a-major-catastrophe

The stimulus worked - even the American Enterprise Institute is forced to admit it.

We can expect 2010 to be a volatile year. This likelihood is underscored by looking back at 2008 and 2009. Two thousand eight was a highly volatile year leading up to the collapse of Lehman Brothers in September, which was followed by the risk of a total systemic meltdown. That sharp and obvious risk spike prompted massive policy responses that were simply the largest that central banks, with rate cuts and liquidity provision, and governments, with tax cuts and spending increases, could manage. The result--beginning in March 2009--was a linear rise in the prices of risky assets, the result of massive relief once the slip into a global depression had been averted and the acute phase of the crisis in the financial sector had passed.

This is going to be a campaign issue in 2010 - the doctrinal rigidity of the DeMints of the world vs. the pragmatism of the Obama Administration - which scored a major success in preventing the total meltdown of our economy.

The subquoted section are quotes from the right wing American Enterprise Institute. Pretty strong words they're using there.

[KrazyHorse]

Drake is likely to have an aneurysm over this one, but, the far right wing economic think tank The American Enterprise Institute has finally admitted that President Obama's stimulus bill has actually worked. In fact, the AEI estimates the stimulus bill has added approximately four percentage points to economic growth in 2009 thus helping fight the worst recession since the 1930's.

Oh Drake, when even your right wing cohorts are admitting the obvious then maybe you should give up the ghost.

http://www.tnr.com/blog/jonathan-chait/aei-says-stimulus-boosted-economy-4

The best part is much of the stimulus is long term projects (bridge construction, freeway expansions, etc) and tax cuts so the stimulus should continue to work for several years yet. Here's a second link:

http://www.delawareliberal.net/2010/...imulus-worked/

Read it before posting: that's a 4 percentage point increase in ANNUALISED growth rates over a SINGLE QUARTER.

That means that for 3 months "the stimulus" added 1% to overall US economic activity. The economic activity in the US in 3 months is ~3 trillion$. 1% of that is 30 billion$.

Now multiply that by the number of quarters you believe the stimulus will/did have equal effect. 8 quarters? 12? Either way, you end up with an increase in activity less than half the size of government spending. Fiscal multipliers are LESS THAN ONE!

[Dinner]

Of course that multiplier depends on how much of the stimulus money has actually reached the construction phase vs allocated money for projects which haven't started yet, or even money which has not yet been allocated.

[KrazyHorse]

No, it does not.

In order to get fiscal multipliers even approaching 1 it's necessary to postulate that the effect of "the stimulus" is equal to what it was according to this estimate (in one quarter) for 24 quarters or so.

That's 6 years.

[Drake Tungsten]

My better half shot down Oerdin's latest idiocy before I even saw it.