Stimulus Bill Job Creation Factoids (And A Fictionoid)

Posted by on . 10 comments.

The House version of the stimulus bill will cost $820 billion and is estimated to create or save 3.7 million jobs over two years.

Thanks to the tireless efforts of Ben Nelson, Susan Collins et al to improve this legislation, the Senate version of the stimulus bill will cost $827 billion and is estimated to create or save about half a million fewer jobs over two years.

The Republicans are busy claiming that their tax-cuts-only version of the bill will create/save 6.2 million jobs. However, an analysis by the Economic Policy Institute concludes that the Republican bill will only create/save 1.3 million jobs. Republicans somehow got it wrong by a factor of 5. Just as they’ve managed to get everything about the economy wrong over and over again for the last eight years.

Comments

  1. Matt Wallace says:
    February 11, 2009 at 10:20 am

    According to the article, the reason why fewer jobs are created by the Democrat bill is two-fold. First, government spending creates more jobs because ALL of the money is spent whereas if you give money to citizens, they save a portion of the money. Second, the democratic bill costs a lot more.

    Somebody needs to explain to me why a private citizen (or business) saving money is a bad thing. It puts money in banks. Banks need money to give loans. Loans spur investment. Investment spurs new jobs, innovation and a stronger economy. Pure spending gives you temporary employment that does nothing to improve the long-term state of the economy.

  2. matt says:
    February 11, 2009 at 10:28 am

    Banks need money to give loans. Loans spur investment.

    the government has poured money into banks. they aren’t lending it. loans spur investment when there is something to invest in. in the middle of a recession, most companies are consolidating and cutting, not investing and expanding.

    Pure spending gives you temporary employment that does nothing to improve the long-term state of the economy.

    pure spending mitigates some of the pain, and buys time to fix the underlying problems.

    this is all pretty indisputable basic economic theory.

  3. FRANK HULBERT Jr says:
    February 11, 2009 at 10:38 am

    THE DOMINO EFFECT: Ref: The Business Cycle and the Future! The degree of leverage caused a cascade of liquidation that was spread around the world. There were issues of intensity and shifts in public confidence. During some periods, society seemed to distrust government and after a good boom bust cycle, sentiment shifted as people ran into the arms of government for solutions. Politics seemed to ebb and flow in harmony with the business cycle. Destroy an economy and someone like Hitler can rise to power very easily. If everyone is fat and happy, they will elect to ignore drastic change preferring not to rock the boat.
    Everything became affected causing the collapse in liquidity and credit to further undermine the global economy as a whole.
    The peak for one nation may be the low for another. For within the scheme of global capital flows, not everyone can enjoy a boom simultaneously. For every gain in trade, there must be someone who loses. This is simply the nature of the global economy. The greatest booms unfold when capital concentrates in one sector. When that capital shifts, you also find the result of the greatest financial panics in history. An individual will always possess the free will to follow the crowd or strike out with his own independence to buck the trend. There will be those who believe in the business cycle and use it to their advantage just as there will be those who refuse to acknowledge its existence. As long as not everyone believes, the cycle will exist forever. The regularity of the business cycle is not determined by man alone; for within its deep calculations resides the very heart of nature itself. Like the Biblical forecast of Joseph that seven years of plenty will be followed by seven years of famine, understanding the nature of the business cycle can certainly enhance our ability to better manage our affairs rather than constantly add to the intensity of the cycle through our own error of intervention. For now, it is more likely that the politics will continue to act in the opposite direction of the cycle adding to its intensity and enhancing its volatility. Perhaps I have been an evangelist seeking to point out that the economy is like a rain forest – destroy one species and it will ripple through the entire system. The global economy to me is the same delicate system that cannot be viewed in isolation, but only through its collective integration. The failed labor policies of Europe have created perpetually high unemployment and the worst record of economic growth for the past 30 years. Instead of objectively reviewing what has happened, Europe seeks to federalize and strengthen the very controls that already exist. Communism and socialism are all political byproducts of our failure to understand the business cycle. Blaming the rich, your neighbor or a particular race are all vain quests to explain the cause of a cycle that has moved through the boom bust phase. Who knows, perhaps it is possible that if for one moment we truly understood the business cycle and worked in harmony with it, the possibility of reducing the amplitude just might result in a more stable political-economy for all mankind.

  4. JV says:
    February 11, 2009 at 10:39 am

    “Pure spending gives you temporary employment that does nothing to improve the long-term state of the economy.”

    Exactly. Temporary employment is not a “job,” it’s just silly “work.” “Work” cannot be called a “job” unless it is guaranteed in perpetuity, in this life and the next. Just ask Michael Steele. He revealed this wisdom this past weekend and turned my world upside down, making me realize the “job” I’ve held for the past 2 years is actually just “work” because I’m a contractor. Hence, the “money” I make to put “food” on the table and use to buy goods and services doesn’t count.

  5. Jon says:
    February 11, 2009 at 11:50 am

    No work is “silly”. There is dignity and honor in all work that we do. Providing food and shelter for one’s family is the least that we can do, but perhaps the most important, and there is nothing but honor in that.

    No job is truly permanent, and neither is any cyclic economic downfall or boom. But rather than do nothing but pray and bemoan the travesty of the last eight or twenty years that got us to this point, I suggest we re-invest in the ailing, ignored infrastructure of this country and put engineers and contractors back to work. This will lessen the blow of our tough economic times and perhaps bridge us to the point where we will boom again. What a simple solution. No religion required.

  6. JV says:
    February 11, 2009 at 1:00 pm

    With you all the way, Jon. I was being sarcastic.

  7. Kenney Johnson says:
    February 11, 2009 at 1:04 pm

    the gov. is all on cnn foxnews and other news networks reporting on the stimulus package, but how come no one is reporting on trying to raise the minimum wage from 6.55 to at least 10.00 dollars an hour this would also help stimulate America’s economic problems!

  8. SD says:
    February 11, 2009 at 2:48 pm

    Right you are, Kenney! Raising the minimum wage _will_ “stimulate America’s economic problems”. It’ll inflate the prices we all pay for services (businesses won’t pay the extra cost out of hand). The helping hand of inflation is the last thing we need at this point.

  9. matt says:
    February 11, 2009 at 3:00 pm

    The helping hand of inflation is the last thing we need at this point.

    hilarious. we’re experiencing deflation currently, and you’re worried about inflation. fantastic!

  10. Chander says:
    February 11, 2009 at 5:32 pm

    No Stimulas will be able to save America….

    The US House of Representative today unanimously passed a resolution recognising the influence Mahatma Gandhi had on Martin Luther King Jr, the great civil rights leader of America who has been a source of inspiration to President Barack Obama”
    The following is the text of the Swadeshi (country/home made) vow from Gandhi:-

    “With God as my witness, I solemnly declare that from today I shall confine myself, for my personal requirements, to the use of cloth manufactured in India from Indian cotton, silk or wool, and I shall altogether abstain from using foreign cloth, and I shall destroy all foreign cloth in my possession.”
    The majority of us do not give thought to such matters but our own actions promote or retard the welfare of our country. Perhaps time has come to wake up and stop buying foreign.