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Election-driven news and views . . . by Jim Geraghty.

White House: Nuh-Uh! Stimulus Jobs Only Cost $185K Each!



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The White House’s pushback on the stimulus cost-per-job-created figure is, er, not as persuasive as they would like:

House Speaker John Boehner, R-Ohio, is just the latest Republican to be publicizing a Weekly Standard report claiming that President Obama’s own economists claim the stimulus bill cost $278,000 per job…

The White House has long disputed the math of dividing the cost of the stimulus by the number of jobs created – we asked a similar question back in October 2009, when that computation resulted in the comparable bargain of $72,408 per stimulus job, as you can read at this blog post.

Then, as now, White House officials note that the spending didn’t just fund salaries, it also went to the actual costs of building things — construction materials, new factories, and such. So the math is flawed, White House officials say, since reporters are not including the permanent infrastructure in the computation, thus producing an inflated figure. White House officials also questioned why the Weekly Standard would use the lower figure from the projection of the number of jobs created, and noted that the temporary nature of the stimulus bill meant that its impact would diminish over time, when the private sector began hiring again. In other words, the number of jobs created at its peak – as many as 3.6 million, according to the Congressional Budget Office’s May 2011 report – would be more appropriate, White House officials say.

Okay, fine. Let’s use the high-end 3.6 million jobs-created figure. That still comes out to $185,000 per job.

As for the notion that because the stimulus was temporary, we shouldn’t be surprised that its impact diminishes over time, that’s refuting a point no one made. More troubling for stimulus defenders is the idea that the CBO report puts the majority of the stimulus’ impact in 2010, when the unemployment rate began the year at 9.7 percent, peaked at 9.9 percent in April, and ended the year at 9.4 percent. In other words, even when the stimulus was at peak efficacy, it had minimal impact on the national unemployment rate.

Also note that the White House does some convenient rounding of their own. In their defense, they state, “The nonpartisan CBO has confirmed that the Recovery Act delivered as promised, lowering the unemployment rate by as much as 2 percent, boosting GDP by as much as 4 percent and creating and saving as many as 3.6 million jobs.” 

Actually, that stretches what the CBO actually said. Their report puts the maximum impact on the unemployment rate at 1.8 percent and as low as .6 percent, and that it boosted “(inflation-adjusted) gross domestic product (GDP) by between 1.1 percent and 3.1 percent.”


Tags: Stimulus , White House


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