The NYTimes is quoted:
Nearly three months after President Obama approved a $787 billion economic stimulus package, intended to create or save jobs, the federal government has paid out less than 6 percent of the money, largely in the form of social service payments to states.
This leads to:
Here’s Joe Biden’s unusual math:Vice President Joseph R. Biden Jr., who writes in a report on the stimulus bill to be released this week that it remains “ahead of schedule” …
“We’re 85 days into a two-year program here …
Let’s see: 85 days out of 730 is 11.6%, yet they’ve only spent $45.6B out of $787B or 5.7%. How’s that ahead of schedule?
I wonder what all the rush was in approving a bill that nobody had read?
Of course, there’s also the promises:… Federal I.O.U.’s — the government has made $88 billion worth of commitments so far …
If we count these, they’re actually ahead of schedule.
What I wonder though is why we should count the I.O.U.’s of institutions that are directly connected to the ability to print money! I understand the macroeconomics and institutional constraints here on that connection, but my point is more philosophical: we’re not talking about uncashed checks here, but rather unwritten ones. Would you count that?
Then there’s this frightening prospect:… A federal government that has often been caricatured as profligate has begun trying to spend money as quickly as possible and has become fixated, to use the new Washington catch phrase, with “getting money out the door.”
And yet they don’t seem to be able to do it.
My that does frighten me. They can't get money out the door fast enough. It reminds me of George Bush shipping pallets of US Dollars to Iraq. Bush wanted that money in circulation. They can't account for untold sums of money. They were giving it to people and telling it to spend it. Those numbers however harsh still pale in comparison to the Stimulus bill, which in total amounts to about all we have spent in Iraq to date.
And then we have the breakdown:
Then there’s job saving:There has been skepticism of the administration’s claim of creating or saving 150,000 jobs.
There are worse things than skepticism: in particular, a lack of awareness of irrelevance.
Let’s take that figure at face value. What we’ve seen over the last 6 months is the economy losing about 600K (net) jobs per month, and the unemployment rate going up by about 0.4% in each of those months. So, 150K jobs translates into a change of 0.1% in the unemployment rate.
You read that correctly. The recession itself has increased the rate of unemployment by about 3% in the last 9 months, and the Obama administration is crowing about averting the loss of 1 out of every 30 of those jobs.
And … what bloggers do is the arithmetic that journalists can’t or won’t. The administration is claiming to have spent $45.6B to save 150K jobs. The magic of a dollar-store hand calculator shows that this is $300,000 per job.
But they’re the one who want us to count their I.O.U.’s to, and if we do it’s closer to $900,000 per job saved.
I think David makes some great points here all around. The stimulus bill really isn't working, and even if it is working it is a collasal waste of resources. Amazing really that this can happen. I wasn't a Bush fan, but I think they called him the worst President...ever a bit too early in the game. This Congress has really outdone itself with the spending, and Obama is taking credit for all this as creating or saving jobs.
Here is Greg Mankiw on Measuring Jobs Created or Saved
Here is the question I would have asked: "Going forward, what macroeconomic data would you have to observe before you concluded that the stimulus bill has been a failure? Or will you conclude, no matter how bad things get, that the economy would have been in even worse shape without the stimulus? And if the latter is the case, aren't these quarterly reports just a bit surreal?"
Surreal indeed. These guys make George Orwell look like a piker. Sphere: Related Content