CBO On Stimulus in 4th Q. 1mil to 2.1mil jobs.

[SirNitram]

Link

The Obama administration's $787 billion stimulus bill created up to 2.1 million jobs during the final three months of last year, according to a new report from the non-partisan Congressional Budget Office.

During the fourth quarter of 2009, the stimulus added “between 1.0 million and 2.1 million to the number of workers employed in the United States,” the CBO said.

The stimulus also boosted the country’s economic growth by 1.5 to 3.5 percent during the time period and lowered the nation’s unemployment rate by between 0.5 and 1.1 percentage points.

In the report, the CBO noted that economic growth in 2009 was worse than they had predicted at the time that the stimulus was enacted, but that was due to a weaker economy than originally expected, rather than any failings of the stimulus.

“Economic output and employment in 2009 were lower than CBO had projected at the time of enactment,” the CBO stated. “But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects” of the stimulus package.

The CBO also said that in the fourth quarter the stimulus package increased the number of full-time jobs by between 1.4 and 3 million compared to the number of jobs that would have existed without the package.

The effects of the stimulus bill are expected to increase as the year goes on, before falling off in 2011 and fading away by the end of 2012, the CBO noted. The non-partisan research office uses economic models to analyze the stimulus and estimate the program’s impact.

Now, let the Right Wingers commence the warding chant of 'Fake locations! Fake locations!' as required.

[Surlethe]

They base all of these estimations on particular macroeconomic models, which are in turn based on a set of assumptions about how the economy's working, etc. Why do we believe these models are any more than crude approximations? (That is, why aren't their error bars wider?) For examples of similar criticisms, see recent arguments about the BLS jobs modeling.

Also -- and I realize that this question is academic with regard to what's written -- what are their uncertainties? That's pretty important if you want to compare the model's projections to reality: if the projected unemployment rate is not statistically different than the actual unemployment rate, it's dishonest spin to say that the unemployment rate has actually fallen because of the stimulus.

[Master of Ossus]

I'd like to see CBO's sensitivity analysis, one of these days, but my fundamental issue with the stimulus is how much money it costs to get so little out of it. How much money was spent that quarter to generate these jobs? The efficiency just doesn't seem to be there, to me.

[Dominus Atheos]

I'd like to see CBO's sensitivity analysis, one of these days, but my fundamental issue with the stimulus is how much money it costs to get so little out of it. How much money was spent that quarter to generate these jobs? The efficiency just doesn't seem to be there, to me.

Don't forget, about half of the stimulus was tax cuts or state aid that prevented the states from having to raise taxes.



Only 35% was actually Keynesian stimulative spending.

Edit: although I don't know if the CBO is counting jobs that were kept because states didn't have to cut as many services because of the aid.

[SirNitram]

The CBO Report In language so simple Congresscritters can comprehend.

[Master of Ossus]

Don't forget, about half of the stimulus was tax cuts or state aid that prevented the states from having to raise taxes.



Only 35% was actually Keynesian stimulative spending.

Edit: although I don't know if the CBO is counting jobs that were kept because states didn't have to cut as many services because of the aid.

According to this, the US spent 5.5% of its entire Q4 2009 GDP on stimulus. That would put our spending in Q4 on the stimulus at somewhere on the order of $200 billion (for simplicity, I just divided our total 2009 GDP by 4 to arrive at our Q4 total GDP). Even using the CBO's 2.1mm jobs saved, that suggests that we're spending over $90k to save each job. For one quarter. The average annual income in the US, for someone who's working, is on the order of $45k. Something does not seem right about where we're spending this money if the goal is to keep people working.