Posted by Anthony Gregory on 10/30/09 4:35 PM [Newer: Domestic Militarism] [Older: America's Worst Month in Afghanistan ]

According to Reuters, "The Obama White House on Friday said it believed grants and loans from the $787 billion economic stimulus plan approved early this year had saved or created 640,329 jobs so far."

We don't know exactly how this was determined and how accurate it is. But consider that. The U.S. government spends over $700 billion and, even if we take its word at face value, manages to have "saved or created" fewer than 700 thousand jobs. That's more than a million dollars per job. Of course, true growth of the economy, true health in the private sector, would mean the creation of jobs that cause economic growth, and much of these jobs do not represent as much wealth as was poured into them. Real jobs make money. Government-created jobs come at a loss. Otherwise the government wouldn't need to get involved -- if they were profitable jobs, the market would sustain them. Only jobs that don't produce more than they consume have to be sustained through subsidy.

But who couldn't create or save a job for a million dollars? If you gave me $700 billion, I could create 700 thousand jobs, too. I'd just pay people a million dollars each to stay at home. The sad thing is, such a total waste could actually be less destructive to the economy than what our government's doing right now.

Posted 10/30/09 6:48 PM Break your chains Byron, GA

Seriously, I'm glad someone took the time to sit down and do the math. I probably never would have figured that out. On second thought, maybe I'm not so glad. Actually, I feel kinda sick. :(

Posted 10/30/09 6:56 PM Double Helix Long Beach, CA

Yeah, the Keynesians have hijacked the nation's treasury, its banks, and its universities. This needs to end soon or America will be toast. Another similar article can be found at www.thecloverhelix.blogspot.com

Posted 10/30/09 7:32 PM BillNM Carlsbad, NM

Anthony, I had already done that math and noted how ridiculous it is. And, it is like throwing it into a black hole. Nothing good will come from it; and the inflation it causes will land on the backs of the people in the form of higher prices. Just a time bounded transfer of wealth to their buddies.

Posted 10/30/09 9:17 PM redshirt Philadelphia, PA

This is one of the reasons some democrats voted against the plan. Even the original stated goal was gibberish. In order to create about 3.5 million jobs at 787 bill, each job would cost over $220k. At $220k, you could have paid two middle class citizens to stay home for two years, effectively "employing" 7 million. Now, as noted by Anthony, since these jobs presumably did not exist before, or were not already sustainable, they in fact represent a drain on the economy. They will either go away and represent a waste of 787 bil, or need further subsidy to continue to exist, wasting even more money.

Posted 10/30/09 10:22 PM BruceKoerber Cedar Rapids, IA

http://economicnumbskulls.blogspot.com/ Friday, October 30, 2009 New Jobs Announced At White House Are White Lies! Of course this is a half-truth. It is the broken window fallacy (read "Economics in One Lesson" by Henry Hazlitt) writ large. Sure; if hoodlums break windows the glazier has plenty of work but what about all the destruction of wealth. Instead of buying a new windshield Joe the Plumber (!) would have bought the tool that would have prevented the accident that caused him to lose his sight in one eye, etc! These 640,329 jobs represent the destruction of wealth caused by the economic terrorists who have usurped our Constitutional Republic and is operating as an unConstitutional coup. Their statistics are bogus at best and just a bunch of propaganda.

Posted 10/31/09 11:23 AM Glenn Cumming, GA

Thanks, Anthony, for the post. One of the local papers reported that the county I live in is eligible for $20 million in bonds under the American Recovery & Reinvestment Act. The county's Development Authority(politically-connected old guys) get to issue the bonds for economic development and infrastructure. The bonds are backed by the U.S Treasury and the feds underwrite 45% of the interest costs. There's a list of approved uses in recovery zones. 60% can be allocated to facilities, 40% to economic development. The Board of Commissioners are just a little too excited for my taste. I'll be asking them to reject federally subsidized loans. I recommended to three of them that they should read Economics in One Lesson by Hazlitt.

Posted 10/31/09 4:09 PM ChaseRehn Pocatello, ID

give me a million and i will create 20 jobs. And they would be a hell of a lot more productive and useful then planting trees on the high way and painting lines in the road. The least we could do is spend the money on assets like a power plant or factories. but we don't produce anything anyway.

Posted 10/31/09 6:29 PM mstebbins Excelsior, MN

I'd prefer that we did pay govt bureaucrats to just stay home. THAT would remove many roadblocks to prosperity.

Posted 11/01/09 10:26 AM fredricwilliams Seoul, Korea (south)

Well, with all due respect to the government bashers, the government didn't spend $700 billion plus, it spent much less. Most will be spent next year, before the election, and some the following year. I guess nobody is happy that the economy grew 3.5% last quarter, and everyone is disappointed that another 700,000 people aren't unemployed. As for the jobs that were saved, most were teaching jobs that would have been cut due to budget problems at other levels. I guess if you think the efforts of teachers are basically a waste of time (putting things in one ear only to have it fall out the other), then you may have a point. If we don't want trees planted or lines painted on the highways, maybe we don't need anything provided by government. Am I right in guessing that everyone here agrees we'd be better off with no streets or highways, no sewer systems, no airports, no police, no social security or medicare, and no Supreme Court . . . or do I exaggerate?

Posted 11/01/09 12:52 PM brentvannmorgan St. George, UT

in response to fredric in Korea. I'm not exactly sure how they run things over there, but in the US most of the things your saying should be funded are primarily funded locally, such as by property taxes and local sales taxes (schools, sewer, police) those things I have little problem with because it is much better controlled at a local level. The people closest to the benefits are paying the bills and have more control over changing the policies of their city governments. I came from a small town and we even had volunteer fire departments and such until we could come up with a way to fund them publicly. the idea that the government saved jobs is false. In the long run the local communities would have made sure that their children had the teachers they needed as they always have. The Federal government should just quit taking money out of my community to only return pennies.

Posted 11/01/09 7:56 PM redshirt Philadelphia, PA

fredericwilliams, You are exaggerating quite a bit. Read Ron Paul The Revolution and End the Fed, Henry Hazlitt's Economics in one Lesson, mises.org, www.free-nefl.com, and the educational links here and many of the blogs. You'll get a better idea. Unfunded liabilities have to be phased out... there IS NO CHOICE. They will fail painfully if they are not phased out (and we will be taxed extremely in the process). Local resources are best funded, well, locally. Supreme Court, sure fine, but note, since when does it make sense for a government to appoint the people that will judge how much power it has? The States and people have a right to refute or nullify laws that are clearly unconstitutional (there are three parties at the table, not one: the States, the Federal gov, and the People). As for the "stimulus"... Actually the numbers are close to the same... assuming about $200 bil spent now, and about 700k jobs "created", it is still well over $200k per job. A total waste. And if these were in fact teacher jobs it would be many more than 700k jobs, so no way that actually happened. It was not a useful distribution of money, newly printed or otherwise. And NO, the highways do not need more maintenance at this point. It is not a productive use of resources during this time of crisis. Production, production, production. That is what we need to be doing. We have roads and streets and highways already. New ones will come along when real demand for them hits (such as access roads to factories). We need to take the government created recession on the chin like adults, and move on with recovery after we hit bottom. It is the only way to avoid a protracted painful recession that may even destroy the dollar. END THE FED!

Posted 11/01/09 9:15 PM fredricwilliams Seoul, Korea (south)

redshirt -- In South Korea there is a rapidly growing economy, excellent roads and highways (they actually fix problems immediately and do major repairs in a few days), outstanding mass transit, national health and dental insurance, and a tax rate of 3.3% plus 3.3% for pensions (people over 60 are exempt from the pension tax). The country has no recession (although the US screw-up last fall cut the growth rate) and it sells more to China than it buys from it. Of course, Korea has been a country since before America was discovered by the Europeans -- and it had a dictatorship until the late 1980s. In the democratic USA, you have tens of thousands of governments (federal, state, county, city, and more) which suck up about $5.5 trillion and deliver decaying roads, overpriced health care, high taxes, wars, and massive debt. As for relating the amount spent to the jobs saved, has it occurred to anyone on this site that when you build a bridge or highway you need equipment and materials, too? The salaries of the workers you are paying are a fraction of expenditures, and are reduced by the taxes these workers will pay, and reduced further by the taxes that will result from their spending (which leads to other people having jobs and paying taxes). As for unfunded liabilities (I guess you mean things like social security and medicare) so far they have always been funded. Congress can end them whenever it chooses. This is a problem only for worriers. I make no argument that these are well-conceived or well-managed welfare programs; however I suspect they are politically invulnerable. You are quite right in preferring local and state government control to federal government control, but as a libertarian I see no justification for government at any level doing much of anything. Whether my neighbors gang up to steal from me to build a school or strangers in Washington steal from me to hire a teacher makes little difference to me or my freedom.

Posted 11/02/09 09:16 AM redshirt Philadelphia, PA

fw, mostly agree. Less government, at all levels. But disagree with some points. The social program ponzi schemes are essentially debt financed and this means a staggering interest burden that can by itself break the back of the camel, regardless of what Congress eventually does. Congress needs to act sooner than later. It is a real problem. Also, as for bridges and roads, repairs and replacement need to be applied to the most urgent first. Throwing money out there for stimulus almost guarantees that many minor projects will be engaged rather than the truly major important ones. And again, since this is money that was either printed or taxed into the government program, it means it was removed from the economy that needed it in the first place, or will be removed via price increases. Given that the government is presently holding the mandate for managing bridges and roads, they will eventually have to spend the money, BUT it would be much better on the infrastructure if it was held and carefully assigned. Better for the economy too since more efficient use of scarce resources means greater gains.

Posted 11/02/09 2:04 PM larry101 New York, NY

Wow the people on this site just don't get basic economics. First, as a prior poster pointed out, not all the money has been spent, so your math is disingenuous at best. Second, to those that think infrastructure spend is a waste, are clueless. The infrastructure in this country is falling apart. It's a long term investment. Believe it or not, there are two sides to the balance sheet. The asset side is equally important as the liability side. Third, you are clueless to the multiplier effect of the stimulus spending. I know its fun to blame the government for all our issues but the fact is the two primary flaws in the stimulus spend is it gave too much away in tax cuts and was not big enough.