CBO: Even though 3.5 million jobs have been lost since stimulus passed, we're going to stick with our claim that it created 3.5 million jobs

from theblogprof by The blogprof


CBO: Even though 3.5 million jobs have been lost since stimulus passed, we're going to stick with our claim that it created 3.5 million jobs: "In the runup to the stimulus boondoggle vote in February 2009, Obama promised that 3.5 million NEW jobs would be created. Instead, 3.5 million jobs have been lost, yielding a 7 million jobs deficit for Obama in addition to his astronomical fiscal deficit. He even got cocky a few times and claimed he'd create 5 million new jobs:

Obama did promise a whole bunch of new jobs. Let's just check out that success, shall we? The below graph represents the gross numbers of able-bodied workers, in thousands, outside the workforce and no longer looking for jobs:

The numbers on the abscissa are in the thousands. The data is from the Bureau of Labor Statistics. Note the star. That represents when the stimulus boondoggle was passed. And here are the jobs numbers:

How is Obama and his ilk saying with straight faces that the stimulus worked, exactly? There is absolutely no indication in the data that it did anything other than waste money. The data is from the Bureau of Labor Statistics. You can clearly see from the jobs data that the stimulus did nothing. There was no change in direction or even trajectory, and the jobs numbers didn't even start to bend upwards until a year later. The only sector that made out is government:

The unemployment rate continues to hover around 10%. Recall that the stimulus package was supposed to stop the unemployment rate at 8%! A crisis could become a calamity? Remember that? Here's how that looks (via Michael's Comments):

Note that the blue lines are the numbers that Obama's team came up with. So the actual unemployment rate is not only worse that what would happen with porkulus, but even worse than was predicted without it. The CBO, however, is giving Obama political cover in the form of fraudulent jobs numbers that don't actually exist. From ABC News:

The Congressional Budget Office has weighed in on the effects of the government’s stimulus spending this past summer and concludes that the Recovery Act raised the GDP, lowered unemployment, and increased the number of people with jobs, but the range of numbers is very, very broad. The CBO also suggests the major effects of the stimulus peaked during what the administration once called the Summer of Recovery, are diminishing, and will “wane gradually” during these final months of 2010.

The unemployment rate has been above 9.5% for 15 straight months. It was around 7% when the stimulus was signed into law. How does the CBO say that the stimulus lowered unemployment when it's actually up more than 2 percentage points? Further:

Price tag: CBO says the original price tag of $787 Billion is actually going to be higher for the 10 year period: $814 Billion spent into the economy 2009-2019.

Jobs: CBO counts them differently than the Recovery Act, but concludes based on economic models that in just the third quarter, July through September, stimulus spending “increased the number of people employed by between 1.4 million and 3.6 million.” (Vice President Biden claims “millions” of jobs have been created and at one point forecast 500 thousand additional jobs a month, an optimistic prediction that did not come true in monthly government reports.)

Uh - WHA??? CBO claims that jobs were created or saved jobs is BASED ON THEORETICAL MODELS, not actual data. From a prior post of mine: CBO Report Claiming 1.5 Million Jobs Created Or Saved Was Pre-Ordained to Show the Stimulus Succeeded, Based On Models That Show Saved Jobs No Matter What

The CBO model started by automatically assuming that government spending increases GDP by pre-set multipliers, such as:

• Every $1 of government spending that directly purchases goods and services ultimately raises the GDP by $1.75;
  
• Every $1 of government spending sent to state and local governments for infrastructure ultimately raises GDP by $1.75;
• Every $1 of government spending sent to state and local governments for non-infrastructure spending ultimately raises GDP by $1.25; and
  
• Every $1 of government spending sent to an individual as a transfer payment ultimately raises GDP by $1.45.

(Note that all CBO figures in this post represent the midpoint between their high and low estimates.)

Then CBO plugged the stimulus provisions into the multipliers above, came up with a total increase in gross domestic product (GDP) of 2.6 percent, and then converted that added GDP into 1.5 million jobs.

The problem here is obvious. Once CBO decided to assume that every dollar of government spending increased GDP by the multipliers above, its conclusion that the stimulus saved jobs was pre-ordained. The economy could have lost 10 million jobs and the model still would have said that without the stimulus it would have lost 11.5 million jobs.

In other words, the books are cooked. The actual data shows the opposite of what Obama claims. No jobs were created and its doubtful that many were saved, sans perhaps government jobs that don't do diddly squat for the GDP.Every single job in America could have been lost, and the CBO would still say jobs were created. It's a farce.

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