Morning Joe hosts did not challenge Thune's claim that the creation of "government jobs" doesn't stimulate economy
SUMMARY: Joe Scarborough and Mika Brzezinski did not challenge Sen. John Thune's claim that the creation of "government jobs" does not stimulate the economy. In fact, Congressional Budget Office director Douglas Elmendorf has stated that, "in terms of the short-term stimulus, either kind of job [government or private sector] works because the people who get those jobs and receive the paycheck go out and spend it, and that's -- or spend much of it, and that is the multiplier effect that economists talk about."
During the February 4 edition of MSNBC's Morning Joe, host Joe Scarborough and co-host Mika Brzezinski did not challenge Sen. John Thune's (R-SD) claim that the creation of "government jobs" doesn't stimulate the economy. Thune claimed that the legislation before Congress "creates a lot of government jobs," adding, "We don't think that you -- that government creates jobs. I mean, government can create government jobs. But the way you create jobs in the private sector is to get money back into the economy, in the hands of people and small businesses, who actually are the job creators." However, Scarborough and Brzezinski did not note that CBO director Douglas W. Elmendorf stated in congressional testimony that when comparing the effectiveness of government jobs with private sector jobs in stimulating the economy, "in terms of the short-term stimulus, either kind of job works because the people who get those jobs and receive the paycheck go out and spend it, and that's -- or spend much of it, and that is the multiplier effect that economists talk about."
Additionally, Scarborough and Brzezinski did not challenge Thune's claim that "what CBO said was that it -- only 12 percent of this is going to be spent this year and under 50 percent next year. So it doesn't really happen for two years. So the question is: Does it really stimulate the economy?" Scarborough and Brzezinski did not note that CBO has answered that question. In analyzing the House version of the bill, and the proposed Senate version, CBO stated that it expects both measures to "have a noticeable impact on economic growth and employment in the next few years." Additionally, as Media Matters for America documented, in his January 27 testimony before the House Budget Committee, Elmendorf said that H.R. 1 would "provide massive fiscal stimulus that includes a combination of government spending increases and revenue reductions." Elmendorf further stated: "In CBO's judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation."
Further, Thune's claim that CBO has said that "only 12 percent of this is going to be spent this year and under 50 percent next year" is false. In fact, CBO's cost estimate of the Senate version of the recovery plan -- based on the federal government's accounting period, in which a "fiscal year" begins on October 1 -- estimated that 26 percent of the bill would be spent before the end of fiscal year 2009 and an additional 52 percent during fiscal year 2010, for a total of 78 percent spent by the end of fiscal year 2010. Additionally, CBO's cost estimate of the House version of the recovery plan estimated that 21 percent of the bill would be spent before the end of fiscal year 2009 and an additional 43 percent during fiscal year 2010, for a total of 64 percent spent by the end of fiscal year 2010.
From Elmendorf's January 27 testimony (accessed from the Nexis database):
REP. ROBERT ADERHOLT (R-AL): The President has talked about saving or creating thirty -- three million to four million jobs, with 90 percent of them in the private sector. About 200 billion to 300 billion in those proposal -- somewhere between 25 and 35, 36 percent -- will be spent on government programs that have very little connection to the private sector. Even accepted the administration's estimates, how many government jobs would this bill create?
ELMENDORF: That -- I'm sorry. That's a question we have not tried to answer. It is quite complicated. The estimates that we've made, as I say, divided all the parts of the bill into half a dozen categories with different multiplier effects, different bang for the buck. But to address the private-sector job count, we'd have to drill that much deeper and really investigate what happens at a very particular level.
So there will be some highway projects that will involve private contractors and some that will involve government employees. There can be school construction done by employees of the Montgomery County Public School System and some school construction done by private employees under contract from the Montgomery County Public School System. So to figure out who is actually getting a government paycheck and a private paycheck could be very complicated, and we just have not -- I'm not sure we could, and we have not tried.
ADERHOLT: What are your thoughts, as far as taking the government jobs and stimulate the economy as opposed to private-sector jobs, as far as how those compare and as far as the overall stimulation of the economy?
ELMENDORF: Again, in terms of the short-term stimulus, either kind of job works because the people who get those jobs and receive the paycheck go out and spend it, and that's -- or spend much of it, and that is the multiplier effect that economists talk about. I think the differences would come down to what you judged as the most effective in supporting long-run economic growth, more than in terms of a short-term stimulus.
From the February 4 edition of MSNBC's Morning Joe:
BRZEZINSKI: I'm just wondering why there was such a difference in opinion. When you talk to the Obama administration or a Democrat behind this bill, they'll say this will create and retain 3 to 4 million jobs. You talk to a Republican, they'll say this is -- this creates no jobs. It does nothing for job stimulus.
THUNE: Well, it does. It -- I mean, you can talk to different economists; they'll give you different views on that. But what CBO said was that it -- only 12 percent of this is going to be spent this year and under 50 percent next year. So it doesn't really happen for two years. So the question is: Does it really stimulate the economy?
And, secondly, it creates a lot of government jobs. I mean, you look at some of the places where this money is spent, there are some places -- in the State Department, for example -- where it's going to be over a million dollars per job. We don't think that you -- that government creates jobs. I mean, government can create government jobs. But the way you create jobs in the private sector is to get money back into the economy, in the hands of people and small businesses, who actually are the job creators.
SCARBOROUGH: OK, so let me get this straight. So --
BRZEZINSKI: Yeah. OK.
SCARBOROUGH: So, in the State Department, Mika, they're going to get this money --
BRZEZINSKI: Right.
SCARBOROUGH: -- and it's going to cost $1 million per job for like these State department jobs. And yet, they're telling people that are running the biggest financial institutions in America they can only make half a million dollars a year. Ain't government great? OK, so, in closing --
BRZEZINSKI: You gotta have some strings attached -- handing out money.
SCARBOROUGH: In closing, John, you ran against [former Sen.] Tom Daschle [D-SD].
Well, see, money spent by the government just "vaporizes" according to Joe. I guess that includes the salaries paid to government employees.
POOF!
GOP talking point of the day: Jobs
http://airamerica.com/blog/2009/feb/04/gop-talking-point-day-jobs
Hmm.......gov't job don't stimulate the economy........must be getting paid with IOU's
What's with all of the media talking heads rejecting the stimulus.
Don't the understand the importance and urgency of what's happening
Well, those talking heads are slaves to the republican party so of course they will do their master's bidding. And the republican party is slave to Limbaugh, so in the end it's Rush's bidding we are seeing here. He couldn't care less what the truth is, he got his fat $40 million contract to lie on big business' behalf.
God, I hate rich people. I mean, I really, really do.
Whether or not it's true we shouldn't be creating government jobs just for the sake of employing people.
There are two choices: we employ them or we pay them w/o having them do work through welfare and other government programs. I'm in favor of the former.
Then the government should employ anyone who is unemployed. That will bring the unemployment figure to "0". Then the snowball effect begins. Taxes will go up and with the minimum wage elevated, less people will be hired who will then turn to the government for a job and so on and so forth until everyone is on the government payroll and no one is paying taxes. It's called 20th century Soviet Union. I long for the Obama bread lines.
Your imagination is running wild.
Wasn't it a lack of imagination, according to Richard Clark, that supposedly disallowed the Bush administration the ability to stop 9/11?
Yes it was. However, there is good imaging and bad.
Well of course, that's true, but Mr. Clark's comment was in retrospect. It was the waiting to act on imagination that, according to Mr. Clark, allowed 9/11 to go unabated. If we don't act and wait for this bloated stimulus package to pass the Senate and chaos ensues because it is enacted, then history will have repeated itself. Without assurances and with too many negatives hanging on to this roller-coaster stimulus bill, doing little or nothing might be the best approach. The great depression ended, with time, without the kinds of government intervention we are looking at today. We're gonna suffer a little but better to feel a little pain now than a lotta pain later, IMHO.
Herbert Hoover took that approach for much of his presidency after the stock market crashed.
You think the market corrected itself? The government employing people is what got us out of the Great Depression.
More like lack of interest. They had numerous warnings of planes being used as missiles in the summer of 2001.
Thune has a government job. Does he not spend the salary he makes?
But the salary he makes costs way more than what he produces. Government employees don't produce anything.
Unlike the highly useful and productive output of MBA's who invent things like Credit Default Swaps or hedge fund managers who swap bookkeeping entries around to create an illusion of profitability. Those guys are truly the engines that power our economy!
I'm sensing a little sarcasm, MYB. My point was no government employee produces more than what he or she recieves in compensation. In my job, I must bring in 3 to 4 times my salary to keep the business going and growing. Show me one government entity that operates in the black and since there are none, to my knowledge, government employees are always a liability to any economy. The larger the government, the larger the liability.
But that's a very misleading comparison. Government doesn't produce a product or engage in commerce. That isn't what it is for. Government services public needs that the private market either won't or can't because they will not be profitable. I don't mean just the obvious things like police and fire and national defense but things like unemployment compensation, public education, national transportation, consumer protection and food, drug and workplace safety. These functions of government simply will not be filled in a market based model. You can't measure the output of a food inspector or a bank regulator by production. The news of the past few months shows what can happen when these functions are treated as if they are commodities.
Government can and often does try to do too much, but the response to that should not be to try and eliminate it completely.
I agree, government is not looked at as a profitable enterprise but maybe it should be. My whole point was that as government grows, the liability factor grows and if more people are working for the government, less people are working for the private sector, which pays all the bills. Therefore, tax rates must go up to compensate for the size of government.
The other point I forgot to make is that if our government does what Hugo Chavez did in Venezuela, which was to nationalize the oil companies, then the government does get into commerce and free trade. With our government and it's renowned waste factor, that would do little to help our economy. The auto industry is poised for such a take-over and so is the banking and housing industry. Fannie and freddie were banking ventures run by our government and we saw what happened there!
I don't think you get the concept of how government works. Government is not designed to make a monetary profit.
And it seems you're somewhat confused as to what the bill actually does.
I'm not at all confused, loonz. I'm concerned.(I don't mean to say that you aren't, BTW)
Well, those unemployed Enron accountants had to land somewhere.
Are there any wingnuts that can specifically cite one instance where a tax cut created a job in the U.S.? These idiotic Republicans are still clinging to this failed notion that all we have to do is keep giving more money back to rich people and a wonderous cornucoppia of employment will burst open. Their intent and their sales pitch are never the same.
Pete, this may help you. Below are the unemployment rates during Bush's Terms. Most of this tax cuts came into play in 2003, from that point on we were at what Econimist call full employment it this country. What does not urprises me is that once the Democrats came into the majority in 2006 till present day the Unemployement rate has incresed.
2002 - 5.8
2003 - 6.0
2004 - 5.5
2005 - 5.1
2006 - 4.6
2007 - 4.7
The massive layoffs happening in large companies and the quiet dissappearances of medium and small businesses are not the results of tax policy and can't be fixed by tax policy. The economy is contracting and these businesses are trying to survive by adjusting their sizes to deal with predicted decreases in consumer spending. The top marginal tax rates are nowhere near the levels they were at when JFK or Reagan cut them and further cuts will not have an appreciable effect on the collapse. Here's a little secret for you, Reagan had a giant stimulus bill too, but he called it Defense Spending.
Hey Moon, that was some great double talk there, still did not address the facts that after Bush's Tax cuts employment dropped.
Correlation is not causation. Get back to me in a couple of weeks when you figure out what that means.
mark is the usual bush revisionist. the first big bush tax cuts were in 2001, not 2003. and as usual, anything good is because of bush, anything bad because of the democrats.
i agree that a lot of this bill is necessary. but some things i think will just add to the debt. the tax credit for first time home buyers for instance. prices have fallen so much that a turnaround is starting in some markets.
After watching Morning Joe again today, I came away scratching my head. Tucker Carlson was on and actually said something I agree with: He said the Republicans have made a fetish of tax cuts, and that tax cuts would not stimulate the economy either.
Around the table, they seemed to agree that nothing in this bill will help the economy. Of course, they offered no solutions or suggestions, just that the current bill was stinky and wouldn't work.
So, there you have it. Neither tax cuts nor government spending will stimulate the economy. Tucker did say that restoring our manufacturing base would help; again, I agree, but how long will that take? We've been pi$$ing it away for 30 years... can we rebuild it by next Christmas?
It's becoming clear to me that the Rush Limbaugh base of the Republican party has one goal... thwart any and all Democratic proposals and take back the House in 2010. It's the only thing that explains their actions.
Hey so according to MMFA's thinking we should just have everyone working for the government?
markb, NO but the GOVT needs to step in when the private sector contracts like in the 1930's. If you dont believe me, ask someone who lived through the GREAT DEPRESSION.
No, our government not designed to be the great job source. Not till you liberal get past that government is not the all to be all. Thanks for our great Government jobs have left this country. If they had any nads, they would put import taxes in play, that way this country would start making things again. Obama has not nads either, one day he says American good only, Gordon Brown calls him out and he runs and hides in a corner, " oh so sorry mr brown, we will listen to you" How about he grows a pair and tells Brown, you know what, right now my concern is the U.S., not you.
Yes thanks to dubya's policy's that gave tax shelters to companies that left the country, in that sense our government has lost us jobs.
1. 'Nads' referred or alluded to three times in a one-paragraph post? Sounds like someone's getting picked on during recess again. Please, let the teacher know.
2. My guess is that you meant to post that UNemployment dropped after the Bush tax cut, but I can never tell with you, because generally you don't try to make sense. But giving you the benefit of the doubt, please tell us what happened to the Unemployment rate when Clinton RAISED taxes in 1993?
markbfoot, I'M afraid that you are all wet from that RIGHT WING KOOLAID. Now, like I said before, ask someone who lived through the DEPRESSION what he or she thought of FDR and the NEW DEAL.Ask yourself if FDRwas sooooo bad the why was he reelected 3 times by wide margins?
Who proposed that? Oh, yeah.... your straw man.
I suggest you take a course in critical thinking.
Government jobs are all well and good, but they don't create wealth, they only create debt (from where we're at on a federal level currently). Additionally, in order to pay to employ new workers, the money has to come from somewhere. Currently, we're running $10 trillion defecits. The bailout has cost $8 trillion. The government IS paying with IOU's, to answer someone else's post.
We are repeating the New Deal. "Grab a shovel, we'll go dig some holes in the wilderness and fill them back up again." Low paying government jobs may keep people employed, but it only feeds more debt into the system, and debt is what is hurting the system right now. Look for massive deflation, followed by rapid inflation due to government policy.
And for the record, I hate Morning Joe and Ms. "New World Order" Mika.
We are repeating the New Deal. "Grab a shovel, we'll go dig some holes in the wilderness and fill them back up again."
What? The TVA and the Rural Electrification Agency alone achieved a whole heck of a lot more than your fevered imaginations of the government sending people out to dig holes for no reason. Peddle your revisionist history elsewhere.
Yep, and a vast majority of the people employed to get those on line were employed by the private sector, under contract to the government.
As it should be. I don't want the government to create permanent positions. I want it to fund infrastructure repairs and improvements of lasting value to this country while putting people to work who would otherwise be getting a government unemployment checks anyway. That was the core of FDR's works program. It's not just about the jobs given but the product of those jobs.
The New Deal programs prolonged the Depression, as the Bush-bailouts (supposedly a free-market president that showed his true colors when it hit the fan, just like Hoover) and the Obama stimulus will. The more you load the economy with these artificial inventions of all-knowing politicians to "stimulate" the economy and "get people back to work" and so forth, the more burden you put on the market. You can't spend yourself out of debt.
The fairy tales about the New Deal programs creating anything of wealth-creating value are false. Infrastructure and such may keep people employed, but it also keeps them poor, because 1) the wages will be low and 2) the wages are paid by the taxpayer.
Very good job of repeating talking points.