Was the Stimulus Worth $278,000 for Each Job Created?

obama stimulus 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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jasontroyjenkins

i dont understand......raise taxes on us but have no accountability on how obama administation spends it. Someone please explain.

July 06 2011 at 1:51 PM Report abuse rate up rate down Reply
htwman

How did Obummer spend his 4th of July?
The Obama administration chose the eave of the holiday that marks our Nations birth by embracing his love for the "Muslim Brotherhood" (MB or ikhwan in Arabic) . That would be the same International Islamist organization that has the destruction of the United States, Israel and all other parts of the Free World as its explicit objective.
When George W. was in office---the interest owed on our National Debt was roughly 25%. Today under Obama---thanks to his give awy programs aka "job stimulus"---that interest is now approx. 40%.
Our country can't stand much more of his benevolent generosity without being on thye brink of collapse---like Greece is today.
Please get this man out of office.

July 05 2011 at 11:37 PM Report abuse rate up rate down Reply
Holly

What's the problem? President Obama actually did create jobs. The money got spread around by purchases that were made by those workers. Where are the jobs that were supposed to be created by the GW tax cuts? There are none. There is only an increase in our national debt.

July 05 2011 at 10:39 PM Report abuse -2 rate up rate down Reply
1 reply to Holly's comment
rrpatreilly

According to the CBO reports, The Bush Tax cuts created over 5 million jobs. That's the government report. Also the CBO reports that the TAX REVENUE generated by the tax cuts increased 47 BILLION dollars over the pre tax cut base. Government numbers, not mine.

July 06 2011 at 7:31 AM Report abuse +2 rate up rate down Reply
jshook99

One more Nail in America's coffin.

July 05 2011 at 9:59 PM Report abuse rate up rate down Reply
tim

spoken like a true free loading demorat!!!!

July 05 2011 at 9:53 PM Report abuse rate up rate down Reply
dugerman85

Does anyone really think that McCain and Palin could have performed any better? Obama's efforts were at least honest, even if they were misguided. GW sold out the nation to the benefit of his corporate faternity brothers, drove the economy over the cliff and handed Obama the wheel. Now all of a sudden, after voting time after time to raise the debt limit so wall street bankers and hedge fund managers could loot the treasury during the Bush years, John "Crybaby" Boehner and Mitch "Butt-Boy" McConnell pretend to care about the debt. Of course they don't care enough to increase revenues by fairly taxing those who have paid so generously for their loyalty.

July 05 2011 at 8:55 PM Report abuse -5 rate up rate down Reply
2 replies to dugerman85's comment
rrpatreilly

I believe a Ham Sandwich could have done better than obama and his anti business socialist administration.

July 06 2011 at 7:32 AM Report abuse +1 rate up rate down Reply
jwtexas1

How do we know there weren't favors to Obama's college or frat brothers? All his records have either mysterously vanished or have been sealed. Does make one wonder a tad ...

July 06 2011 at 9:30 PM Report abuse rate up rate down Reply
George

You can make the numbers play out any way you want. In our area many of the jobs created and saved are/have gone into building infrastracture such as roads. This is not inexpensive when one considers the cost of asphalt or other building materials, the heavy equipment used, the cost or upkeep of that equipment, etc. The direct cost of each jop saved or created probably averages out to about $50,000. In addition there are all the costs for permiting, design, administration of the grants, etc. I think one can easily account for at least $150,000 plus of the cost per job and while the number calculated by Fox does seem a bit high, I don't believe it fully accounts for the trickle down effect as those $ are spent in each local community. I suspect that for the 3,000,000 people who have jobs, the people in the shops and stores that served them and their employers, and the mayors of their communities, they would all say that it was worth it. Can you imagine how much worse it could have been?

July 05 2011 at 8:33 PM Report abuse -5 rate up rate down Reply
gosmith502

Seems to me the whole issue being missed in the discussion of the TARP or "Bailout Program championed by the President and his advisors is the utter failure of the advisors from academia to produce anything worthwhile. What sounded great in the comfy confines of a classroom filled with tenured wizards was an utter failure in the marketplace. Once aagain there comes the echo of the old saying: "Those can do and those who can't research or teach"

July 05 2011 at 8:29 PM Report abuse +7 rate up rate down Reply
crago55

President Obama said that the shovel ready jobs were not so shovel ready and the 2 people that were sitting next to him were laughing all of those suppose to be shovel ready jobs were paid for by the stimulus program which was a failure.I keep hereing that President Clinton presidency created more jobs with a higher tax rate then President Bush created and that was only because China was not an economic power back then compared to now.The only way to create jobs is to get rid of all the useless goverment regulations and let small and big business create jobs here in the States.

July 05 2011 at 8:27 PM Report abuse +5 rate up rate down Reply
zzyxx

well he is such a genius on economics...come on public get with the program ..it is too complicated for you little people to understand.

July 05 2011 at 8:04 PM Report abuse -3 rate up rate down Reply

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