NY Post op-ed falsely claims Obama promised stimulus would end net job losses
In a New York Post op-ed, Brian Riedl of the Heritage Foundation falsely suggested that President Obama promised the Recovery Act would end net job losses; in fact, Obama stated in February 2009 before the stimulus passed that the "magnitude of the crisis" means that even with the stimulus "you're going to have some net job loss, but at least we can start slowing the trend." Additionally, Riedl attacked the "White House estimate of 'saving' nearly 2 million jobs" as "nothing but faith-based economics," ignoring that the administration's estimates of the stimulus' job impact falls within the range of those given by independent analysts.
Riedl falsely suggests Obama promised to end net job losses
From Riedl's February 18 New York Post op-ed:
Last year, White House economists claimed that the $862 billion stimulus would create 3.3 million jobs. Since then, the nation has lost more than 3 million jobs.
That's a 6.3 million jobs gap. By the White House's own standards, the stimulus failed.
So President Obama has shifted his argument. Sure, the economy lost jobs, he concedes -- but without the stimulus, it would've lost nearly 2 million more jobs.
In fact, Obama said stimulus would "slow" job losses
Obama: "Magnitude of the crisis" means "you're going to have some net job loss" even with stimulus. During a February 9, 2009, press conference, Obama stated that because of "the magnitude of the crisis and the fact that it's happening worldwide," even with the stimulus package. Obama added: "That still means that you're going to have some net job loss, but at least we can start slowing the trend and moving it in the right direction."
Administration's estimate of stimulus job impact calculated from "the no-stimulus baseline." In a January 9, 2009, report on the job impact of a "prototypical" stimulus package "in the range that the President-Elect has discussed," Christina Romer and Jared Bernstein estimated that a stimulus package would raise employment by between "3.3 to 4.1 million jobs" by the end of 2010. The report clearly notes that this estimate is calculated "relative to the no-stimulus baseline" and is therefore not an estimate of the net change in jobs by the end of 2010.
Riedl said the White House estimate of saving nearly 2 million jobs so far is based on the administration's "faith-based economics"
From Riedl's February 18 New York Post op-ed:
This is nothing but faith-based economics. The White House estimate of "saving" nearly 2 million jobs is based not on observations of the economy's recent performance -- but merely on the administration's unshakable belief that deficit spending must create jobs and growth.
Specifically, the White House staff's "proof" that the stimulus created jobs is an economic model that they programmed to assume that stimulus spending automatically creates jobs. How's that for circular logic?
In other words, even if we'd lost 20 million jobs, their models would basically crank out the conclusion that we'd have lost 22 million without the stimulus.
[...]
The stimulus theory is that government spending injects new dollars into the economy, thereby raising demand and spurring economic growth. That makes some sense -- if you don't ask where the government got the money.
Congress doesn't have a vault of cash waiting to be distributed. Every dollar it "injects" into the economy must first be taxed or borrowed out of the economy. No new income, and therefore no new demand, is created: It's merely redistributed from one group of people to another.
But independent analysts agree stimulus has increased employment and GDP compared to no-stimulus baseline
White House economic advisers: "CEA's estimates ... are consistent with a broad consensus of numerous professional forcasters." In a quarterly report issued January 13, the White House Council of Economic Advisers (CEA) estimated: "As of the fourth quarter of 2009, the CEA estimates that the ARRA has raised employment relative to the baseline by between 1½ and 2 million. The CEA estimates for both the effects on GDP and employment are similar to those of respected private forecasters and government agencies." The report indicated that the nonpartisan Congressional Budget Office estimated that the stimulus raised employment by between 800,000 and 2.4 million jobs through the end of 2009 and that private analysts at Moody's Economy.com estimated that the measure raised employment by 1.6 million jobs. From the CEA's quarterly report:
Politifact.com stated on February 17, "Using updated estimates provided to PolitiFact, IHS/Global Insight estimates that 1.7 million jobs will be created or saved by the first quarter of 2010. And Moody's economy.com estimated that 1.9 million jobs will be created or saved by that quarter." Politifact also noted that "Gus Faucher, the director of macroeconomics with Moody's economy.com, said he disagrees 'very strongly'" with Riedl's statement that "every dollar" spent on the stimulus "must first be taxed or borrowed out of the economy." Politifact said Faucher argued "that in a weak economy, the government isn't displacing other economic activity but is instead creating new economic activity."
Both sides are being disingenuous at best.
The Obama administration did tell the American people that the Stimulus plan would keep unemployment below 8%. When you tell the American public a specific figure, they will hold you to it, whether you like it or not. Many people are also upset with it because a lot of the spending is completely wasteful. There is no reason to increase the deficit and national debt in order for our representatives to throw money away on stupid things like turtle tunnels/walls, etc. I think people have a right to be upset about this type of thing.
The Republicans are using much of this package as a talking point and playing into the populist angst of many people who see it as wasteful and not creating any real world jobs. I think it goes without saying that the spending has helped the GDP and that some jobs have been created. But government spending on borrowed money is only a temporary boost to the GDP because its borrowed money, so its not really a real world increase since it hasn't created any wealth.
The stimulus has helped the economy, no doubt. But lets be real here, without the partisan bickering - giving someone a raise is not a "job saved" or "job created" as the administration is currently counting it. A 4, 5, 6 week temporary position, then going back on unemployment should not be a "job created" in my view. How can you prove a job was ever in jeopardy if they never lost it? I think there is much to be desired in the methods that they are counting here, and the real world numbers are no where near the numbers they are citing. But to say it hasn't done any good is false as well.
I think the major point in all this is going to be how the $800B borrow effects our currency through increased national debt, deficit, and inflation.
The TARP and FED actions have had a much larger impact on keeping the economy from imploding than the stimulus bill.
The positive effects that it may have had, which everyone knows are difficult to measure (if at all possible), are still not going to be enough to convince anyone to look at you highly for saying you helped pass it.
People like you would argue the color of the sky if the dems claimed it was blue. And you'd have your eyes closed while making that asinine argument.
We've had countless votes to raise the debt ceiling. It didn't EVER cost $57,000 to weatherize homes - that's your side's failure to understand what's going on here and your distortions of reality!
It is MUCH better for our grandchildren's economic future to have saved the economy from a disastrous 2nd Great Depression.
Yes we have, two in the last several months to be exact.
http://www.nypost.com/p/news/opinion/editorials/the_anger_builds_Xlm75AJLbAlFmZvXiqL9aO
And there are countless other similar articles from just about every news outlet such as cnn, etc.
First, there is no proof that we ever would have had the 2nd great depression. There are signs that it COULD have happened. I do commend you on your attempt to derail me from what I said. I'm talking about them having a $140,000+ debt charged to them before they are even born.
In 2009 well over half of the jobs supposedly created went to the public sector (over 25K government jobs). It has wasted so much of our tax dollars our grandkids won't be able to pay it back. They can't even get their numbers right, they're just guessing the numbers and hope Americans are gullible enough to believe it.
So...yes rigght, this is a recovery.
Reagan's trickle down also showed LOSSES in GDP four out of his first seven quarters.
I'd like to think that for the most part, the stock market in both instances couldn't get too much lower before having to go back up. Its called the "bottom" for a reason. I don't think that Reagan or Obama have done much to receive credit for the stock markets going up. When companies lose value in stock, they become leaner in order to generate a certain profit percentage. Then start expanding from there. Its a cycle they repeat on their own, government intervention didnt do much to change or speed this up. After all, if the inverse were true and Obama/Reagan had positive effects on the market - how can you explain stocks going up 57% while unemployment goes down and people don't have as much money to spend? As I said, its a cycle, not government intervention.
Give credit where credit is due....but neither of these two deserve much of it in this case.
Im sorry chrisgodawgs, the economy may be improving, but after the unexpected increase in job losses announced yesterday its too soon to tell.
Either way, a 1 month decline in the unemployment percentage is NOT a trend. You need more than 1 for a trend.
Did Bush inherit a recession as well?
Where did the rate go after his tax cuts?
Where did the rate go after the mid term election of 2007?
source: www.bls.gov
bureau of labor statistics
It shows the amount of jobs lost and gained correct each month.
Do you happen to have a link to the amount of jobs in the country over the same time period?
if so do you have one versus normal government funded, TARP Funded and private sector jobs would be very interesting to see as well.
The reason I ask is sooner of later the job loss rate had to drop, it couldn't reach zero and it would be nice to see where we really are at.
The White House actually DID say the stimulus would create -- not just save -- 3.3 million net jobs.
See Christina Romer and Jared Bernstein, “The Job Impact of the American Recovery and Reinvestment Plan,” January 9, 2009, p. 4, at http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf.
The report projected that, through fall 2010, the baseline economy would lose 0.4 million net jobs (from 134.3 million to 133.9 million), ) while the economy with the stimulus would instead add 3.3 million net jobs (from 134.3 million to 137.6).
So they didn't just say save or create 3.3 million jobs. They specifically said that nonfarm payroll employment would rise from 134.3 million to 137.6 million. Despite enactment of the stimulus, the number of jobs has fallen to 130 million.
Sorry, facts are facts.
As for the PolitiFact column, see http://blog.heritage.org/2010/02/18/politifact-declares-century-long-economics-debate-over/
Brian Riedl
Heritage Foundation