Thursday, September 08, 2011

Stimulus Syllogism

With President Obama about to propose a new stimulus package, it's worth asking whether the first one was a success. There's lots of data on the topic, but I prefer a simpler approach, based on the Congressional Budget Office's recent assessment, "Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From April 2011 Through June 2011."

1) The American Recovery and Reinvestment Act cost $787 billion. The CBO says (at 1) that the act added $825 billion to the deficit, but I'll conservatively use the first figure.

2) The CBO estimates (at 2) that the ARRA added between 1.0 and 2.9 million jobs. Again, conservatively, let's use the higher number.

3) Dividing 1) by 2) yields $271,379, which is how much each stimulated job cost. More even than I thought.

4) Don Surber suggests one reason why the ARRA was a bad deal:
In order to break even, 2.9 million jobs would have to pay $200,000 a year to pay back taxpayers their investment in 12 years (that’s at the average of 24.4% in net federal income taxes paid by people who make $200,000 or more).
5) Still more simply, in 2009, the median family income was $49,777 (see page 40). Meaning we could have subsidized directly for five years as many people for the price of jobs created by the stimulus package. Remember, the White House says the stimulus created only "temporary" jobs (see Executive Summary) probably lasting far less than five years.

Conclusion: The stimulus was wasteful and inefficient. Any questions?


MaxedOutMama said...

Not from me. It was a rather pathetic performance, over all.

Anonymous said...

Why was job creation under the Bush administration the lowest since the 1940s, since he lowered taxes for the wealthy?

Carl said...

Anony: Bush lowered taxes rates for all, not just the wealthy, while at the same time, the share of Federal taxes paid by the upper quintile increased under the Bush tax cuts. On jobs, compared with when Bush left office, is unemployment higher or lower? This is not a trick question. As for Obama's job performance, see Congressman Issa quoted at Ace.

In general, Anony, try facts first, debate second.

OBloodyHell said...

>> In general, Anony, try facts first, debate second.

To be honest, Carl:

> Any questions?

You DID neglect to provide the adjective "intelligent"...

A common sense aspect of things, but we ARE dealing with Leftists, remember?

As I have already long since noted, if there were a "Wisdom Quotient" test to match the IQ test (Wisdom=="Common Sense"), leftists would find themselves in the lowest quartile.

I'd venture that's why no one's come up with such a test. Psychologists, as soft-scientists, tend towards being liberal themselves, and could never accept the idea that they're complete Widiots.

You can see the peer review meetings, can't you? Something like this:

"Oh, come on!! You, too!?!? There's obviously something wrong with this test! We can't ALL be that low! Clearly it's not ready for implementation."

Powerboss said...

I sourced this blog post at a debate website. You were called a very rude name by a leftist. LOL... And said you weren't an authoritative source.

Carl said...

Powerboss: hilarious -- especially since (after calling me that rude name), his only answer was an optimistic, but more important, speculative prediction about unemployment next year. Now that's authoritative!

Leftists have no data--instead, they have feelings.

Carl said...

Now, not even the White House is willing to predict specific jobs numbers. I wonder whether that means the leftist will call Obama a rude name.