You know all of those jobs the 2009 stimulus plan was supposed to create?

From the Federal Reserve Bank of San Francisco, the number appears to be approximately zero.

Abstract
This paper estimates the “jobs multiplier” of fiscal spending using the state-level allocations of federal stimulus funds from the 2009 American Recovery and Reinvestment Act (ARRA). Specifically, I estimate the relationship between state-level federal ARRA spending and the change in states’ employment outcomes from the time the Act was passed (February 2009) to some later month (through August 2010). Because the allocation of stimulus spending across states may be endogenous with respect to state economic outcomes, I instrument for stimulus spending using exogenous formula-driven cost estimates made by the Wall Street Journal and the Center for American Progress around the time that the ARRA was passed. To control for the counterfactual – what would have happened without the stimulus – I include several variables likely to be strong predictors of state employment growth. The results point to substantial heterogeneity in the impact of ARRA spending over time, across sectors, and across types of spending. The estimated jobs multiplier for total nonfarm employment is large and statistically significant for ARRA spending (as measured by announced funds) through March 2010, but falls considerably and is statistically insignificant beyond March. The implied number of jobs created or saved by the spending is about 2.0 million as of March, but drops to near zero as of August.  (March, when temporary census workers were hired; August, when they were laid off. — DRP) Across sectors, the estimated impact of ARRA spending on construction employment is especially large, implying a 23% increase in employment (as of August 2010) relative to what it would have been without the ARRA. Lastly, I find that spending on infrastructure and other general purposes had a large positive impact, while aid to state government to support Medicaid may have actually reduced state and local government employment.

Hat tip to Ed Morrissey, via Hube. From Mr Morrissey:

The results suggest that though the program did result in 2 million jobs “created or saved” by March 2010, net job creation was statistically indistinguishable from zero by August of this year. Taken at face value, this would suggest that the stimulus program (with an overall cost of $814 billion) worked only to generate temporary jobs at a cost of over $400,000 per worker. Even if the stimulus had in fact generated this level of employment as a durable outcome, it would still have been an extremely expensive way to generate employment.

Of course, no one can actually know what would have happened; Mr Wilson’s paper is his best analysis. But I don’t know why we should trust it less than we’d trust the guys who told us that passing the stimulus plan would hold unemployment down to 8%. Mr Morrissey concludes with:

The real question at the end of the day is this: opportunity costs.  Had the government acted to restrain regulatory growth and allow investors to keep an extra $800 billion in early 2009, would we have created more net jobs by August 2010 than zero?

Ahhh, well, it’s probably racist to ask such questions.

15 Comments

  1. The whole sorry charade wasted time and money on left-wing nonsense. Republicans told them the only thing their plan would stimulate was more debt. But the Left wouldn’t listen.

    Leftists are incapable of rational economic thought, they’re so steeped in the outworn creeds of Marxist envy and greed compounded by class hatreds, they have no objective frame of reference. It’s a trained incapacity to respond constructively to modern economic realities in conflict with their antique nostrums.

    These people can’t even give away money without making a botched job of it.

  2. These people can’t even give away money without making a botched job of it.

    Hilarious, and true. Good job!

  3. “Ahhh, well, it’s probably racist to ask such questions.”

    It’s racist to ask any questions leftists don’t want asked. Or, “eliminationist”.

    So just shut up and do as you are told.

  4. O’Malley/Obama Deceptionhttp://commonsensepoliticalthought.com/?p=6574

    O’Malley/Obama Deception
    Posted by Yorkshire on 25 July 2009, 4:17 pm

    Here’s a little, no a lot of deception taking place on this sign. This sign is located around milepost 34.5, I-83 off the shoulder of the northbound lanes. The sign touts putting Americans back to work repaving I-83 from Mt. Carmel Rd., Exit 27 to the MD-PA line which is at Exit 37 or approximately 10 miles (16 km). There’s one little problem with this sign. It’s wrong and deceptive. Last summer the State of MD repaved I-83 from Mt. Carmel Rd., Exit 27 to York Rd, Exit 33. This was done well before any Stimulus/Recover Bill was introduced or passed in Congress and signed by BO. So, where this sign is saying the Stimulus Act was paying for 10 miles of repaving, 6 miles were already complete last year. So, the Stimulus Act will pay for 4 miles, not 10. Don’t ya just love being deceived? (And yes I drive on this most days of the week for the last 34 years so, yes, I noticed this.)

    Filed under 2009 Economic Stimulus Bill, Defecate Spending, Freedom from Reality, Liberal hypocrisy, Pure Bovine Feces

  5. I read the linked letter, and it seems to me that the author doesn’t understand, or doesn’t want to understand, that President Obama isn’t being judged on the color of his skin but on his job performance as President.

    To some extent, all Presidents are judged unfairly, given the blame for things outside of their control. But, then again, they deserve that, since they so often claim the credit for things they had nothing to do with.

  6. The following is from The American Thinker, by Yossi Gestetner, December 09, 2010

    “The Economic Legacy of the Four-Year Democratic Congress”

    “From early 2007 through the end of 2010, the Democrats had strong Majorities in — and control of — the US House of Representatives and also the U.S. Senate. Both are chambers where laws and policies that affect the economy are created and shaped.

    The following table shows how the Democrat Congress performed on average during its four year tenure, vs. the average of the previous four years, 2003 through the end of 2006, when Republican were at the helm:

    Issue/Topic Democrats Republicans

    Jobs by Year – Average -1,583,000 +1,672,000

    Jobs by Month – Average -131,916 +139,333

    Unemployment Rate – Average 7.48% 5.3%

    Budget Deficits – Avrage $1.143 Trillion $285 Billion

  7. ropelight quotes a lie:

    “From early 2007 through the end of 2010, the Democrats had strong Majorities in — and control of — the US House of Representatives and also the U.S. Senate.

    Republican Scott Brown was elected to the Senate, taking the late Ted Kennedy’s seat, thus ending the theoretical 60 filibuster breaking vote. Therefore quoted the statement is false, calling to question the credibility of the author.

    This author also does not take into account the mess that Obama inherited from day one of his presidency. Therefore, his op/ed is dishonest, in my opinion.

  8. Perry’s comment is an example of grasping at straws, in my opinion. Democrat Harry Reid was Senate Majority Leader with control over the Senate’s rules and its legislative agenda, Democrats controlled every Chairmanship position and the majority of seats on every committee. Democrats had control over the Senate Staff and the budget, Democrats took the best office spaces for themselves, awarded themselves more staff positions, decided when the Senate would convene and when it would adjourn.

    To claim that Scott Brown’s election eliminated Democrat control over the US Senate is a brazen falsehood. Democrats could no longer run roughshod over the minority with a filibuster proof majority, but they still controlled all the levers of power in the Senate.

    Perry’s attempt to dispute the obvious is an example of his serial dishonesty, and typical of his duplicitousness, in my opinion.

  9. ropelight responds:

    To claim that Scott Brown’s election eliminated Democrat control over the US Senate is a brazen falsehood. Democrats could no longer run roughshod over the minority with a filibuster proof majority, but they still controlled all the levers of power in the Senate.

    Be honest here ropelight. Against a filibuster threat, the overarching power in the Senate goes to the minority, especially the way the 111th Senate Republicans have used it, more than double their own previous record in the 110th. No bill which the Republicans oppose gets past the Senate to the President’s desk. There’s the ultimate power, indisputably. I do not dispute the other points you made.

  10. Perry accuses someone else of lying:

    ropelight quotes a lie:

    From early 2007 through the end of 2010, the Democrats had strong Majorities in — and control of — the US House of Representatives and also the U.S. Senate.

    Republican Scott Brown was elected to the Senate, taking the late Ted Kennedy’s seat, thus ending the theoretical 60 filibuster breaking vote. Therefore quoted the statement is false, calling to question the credibility of the author.

    The author did not say that the Democrats had a “filibuster-proof majority.” He said that the Democrats had “had strong Majorities in — and control of — the US House of Representatives and also the U.S. Senate.” That statement is completely accurate, calling into question Perry’s credibility.

  11. Perry also wrote:

    This author also does not take into account the mess that Obama inherited from day one of his presidency. Therefore, his op/ed is dishonest, in my opinion.

    Except, of course, that the author was speaking of “The Economic Legacy of the Four-Year Democratic Congress.” That includes the 110th Congress as well as the 111th; when the Democrats took the Congressional majorities, the economy was strong and business was booming.

    If you wish to blame the government for the recession, you have to remember that the Democrats controlled the Congress at the time; they weren’t innocent bystanders.

  12. Dana raises a question of credibility:

    The author did not say that the Democrats had a “filibuster-proof majority.” He said that the Democrats had “had strong Majorities in — and control of — the US House of Representatives and also the U.S. Senate.” That statement is completely accurate, calling into question Perry’s credibility.

    Under normal circumstances I would agree with you, but hardly do right now, with extremist Repub Senatpr terrorists in charge of the filibuster threat button. Moreover, they just got finished terrorizing Obama into giving a tax cut to millionaires and billionaires, holding him hostage re unemployment payment extension and tax cuts for the middle, and refusing to allow any Senate activities until the tax cut extension is passed. This is what Repub Senate terrorists do!

    Their terrorist game is obvious: Convert Bush tax cuts into Obama tax cuts, and the Bush-Obama deficit into the Obama deficit, just in time for the 2012 elections. And in the meantime, do nothing substantial about job creation. It appears as though the House Dems are ready to fight this time. Let us see what happens next.

Comments are closed.