Vice President Biden just released his first quarterly report on the nation’s stimulus package. As expected, he thinks we are doing GREAT!!!
Really? Matt Apuzzo checks some of Biden’s claims/lies, including my favorite:
THE WHITE HOUSE SAID: The stimulus has created or saved 150,000 jobs.
THE FACTS: Since February, the nation has lost more than 1.3 million jobs, according to the Department of Labor. To make the case that the country created jobs over that same stretch, the White House has put forward a benchmark of jobs created “or saved.” The argument is that the job numbers would have been even worse had it not been for the stimulus, and the difference between those numbers is a net positive.
To visualize that disconnect, consider this: The administration has promised to create or save 600,000 more jobs in the next 100 days. Even if the nation loses another 5 million jobs during that span (a highly unlikely prospect) the White House could still claim success.
There are few hard numbers when it comes to tracking stimulus jobs. The Obama administration numbers are based on estimates by the White House Council of Economic Advisers, based largely on a formula Obama’s transition team put forward. It estimates the effect of tax breaks, government spending and social programs on job growth.
Spending money will put people to work. But spending has a cost. At some point, Washington will have to pay for this program, either by raising taxes or interest rates, and those policies typically hurt job growth. The Obama administration’s job data do not take into consideration this back-end cost, an omission some economists, particularly conservative economists, say is a flaw in the analysis.
The whole thing here.
Also here is a great post by Greg Mankiw about Obama’s promise to “Create or Save” jobs. He writes:
The expression “create or save,” which has been used regularly by the President and his economic team, is an act of political genius. You can measure how many jobs are created between two points in time. But there is no way to measure how many jobs are saved. Even if things get much, much worse, the President can say that there would have been 4 million fewer jobs without the stimulus.
I think it is worth saying again and again: The government cannot create jobs or, more precisely, the mere creation of jobs is not an appropriate economic policy objective. You can add jobs to an economy yet create no economic value. For example, imagine hiring someone to dig a hole every morning and someone to fill it in every afternoon: You create two jobs, but nothing of economic value. A striking real-life example is the former Soviet Union, where unemployment was low because the government gave a job to everyone, and yet the economy was stagnant (which is nice way to talk about the economic and human horrors of living in a communist regime). Economic policy is appropriately directed towards economic growth, which means: Get the government out of the way; cut taxes and spending.