Was the Stimulus Worth $278,000 for Each Job Created?
It's become the most charged word in the American political lexicon -- jobs. The 2012 election is beginning to heat up, and an unemployment rate hovering around 9 percent might both bedevil the incumbent White House and prove a godsend to Republican challengers.
In a bid to control the narrative about the unemployment rate, the White House is framing the release of the seventh quarterly report on the economic impact of the 2009 stimulus, also known as the American Recovery and Reinvestment Act, in positive terms.
The $787 billion spent on stimulus has created or saved anywhere between 2.4 million and 3.6 million private and public sector jobs, the White House report claims. (The numbers are based on jobs statistics provided by the Bureau of Labor Statistics. And the report is put together by the White House's Council of Economic Advisers, whose three members are selected by the Obama White House.)
The White House is also saying that the funds, accordingly, helped boost the Gross Domestic Product by as much 3.2 percent through the first quarter of 2011.
In response to the report, critics are highlighting the stimulus' failure to bring the unemployment rate to below pre-recession levels. A report put out by Fox accepts the White House figures, and then calculates the cost of each job saved or created to be $278,000. (The language of the White House report emphasizes that the stimulus provided a "cushion" for the nation's economy, and so such a calculation could ignore the attendant consequences of not having taken any action.)
"It makes one ask for a more precise accounting of the spending," says David Frum, the conservative commentator, on his blog. "Shouldn't we have expected more jobs?"
And in spite of the upbeat tone of the report, other recent developments provide a window into the context of the report.
Just a month before the report was released, the chair of the Economic Advisers Council, Austan Goolsbee, announced that he would be leaving government to return to academia at the University of Chicago. And while Goolsbee will continue to advise the Obama campaign in 2012, his departure was widely chalked up to a desire to duck "out the back door for his own safety" in the face of mounting economic challenges, in the words of National Journal Chief Correspondent Michael Hirsh. Treasury Secretary Timothy Geithner is also said to be considering an exit from government.
Critics have also pointed to the timing of the latest release -- the Friday afternoon before the July Fourth weekend.
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Dan Fastenberg was most recently a reporter with TIME Magazine. Previously, he was a writer for the Thomson Reuters news service's Latin America desk. He was also a reporter and associate editor for the Buenos Aires Herald while living in South America.
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