Much mockery has been made of the reported “jobs created or saved” by the stimulus package – from jobs created in Congressional districts that don’t exist to the Washington Examiner’s collection of non-existent jobs (to this point, finding 80,000 of the reported 640,000 jobs created to be phony).
Josh Barro of the Manhattan Institute has a good article on the impact of the stimulus, noting both some of the phony “job created,” but also why these number are worse than meaningless.
They’ve chosen to guess that every worker paid with stimulus dollars would have otherwise been laid off …
Without stimulus funds, states and localities would have faced even bigger budget gaps, and they would have closed them in part by laying off more workers. But it’s also safe to assume they would have found ways to retain most of the workers now funded by stimulus, just as they retained most of those who were threatened by budget gaps. The true stimulus job savings would only be a fraction of what’s reported – even if the report accurately reflected the jobs funded by stimulus dollars.
This still leaves aside an even larger problem with “jobs created or saved” figures. They reflect “seen” effects – specific jobs funded by the stimulus – but not “unseen” ones. The figures cannot account for jobs lost because greater government expenditure leads to higher taxes or more government borrowing, discouraging private investment.
Indeed, with unemployment continuing to increase – above even what the Obama administration estimated it would – the phony data claiming the “stimulus is working” is as embarrasing as standing in front of a “mission accomplished” banner. Nonetheless, Obama and others continue to claim that the economy would have been worse without the stimulus.
Of course, when we predicted that the stimulus would fail, we also expected that supporters would in fact claim it was working regardless, citing the imaginary world without a stimulus. Sometimes, I hate being right all the time.