If This is Best Stimulus Can Do, Then We Are All in Trouble
New figures released by the White House on Oct. 30 add to evidence that the federal economic stimulus package is working to create and save jobs. Unfortunately, that’s not altogether good news.
Why not? Think about it: If the stimulus is working, and the job market is extremely weak in spite of it, what will happen when the stimulus begins to fade sometime next year? Many economists are increasingly worried that the U.S. recovery will be agonizingly gradual, especially if it doesn’t get another jolt of help. “I think it makes sense to look at more aid from the federal government, whether they call it stimulus or not,” says Gus Faucher, director of macroeconomics at Moody’s Economy.com, a West Chester (Pa.) consultant.
The White House report said $160 billion worth of the stimulus funds spent so far—out of the $787 billion total in the stimulus plan—have “created or saved 640,329 direct jobs” through the end of September. The almost comically precise number is based on reports by recipients of stimulus funds. The White House says the actual number of jobs saved or created is greater than that—probably more than 1 million—because the $160 billion measured represented only about half the money spent so far, and because people who are hired with stimulus funds tend to spend their pay and create secondary employment.
To back up its claims, the White House also released a white paper showing that independent economists estimate that the stimulus package has created or saved anywhere from 620,000 to 1.5 million jobs through the third quarter. Those numbers figure in all of the stimulus spending to date as well as secondary employment, which is fair.
Read more at Real Clear Politics
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