Originally published July 8 2011
Economics of the insane: Obama's stimulus cost $278,000 for each new job created
by J. D. Heyes
(NaturalNews) There is a reason why libertarian economists want the government to stay out of the business of business - it's because government is not good at it.
On that premise, then, it should come as little surprise that the Obama administration's attempt to "create jobs" didn't turn out so well. In fact, you could call it perhaps the most expensive job program in the history of government job programs.
Though the White House is loath to admit it, a recent analysis of the administration's stimulus program found that for each job created, taxpayers coughed up a stunning $278,000.
In its report on the job-creation impact of the $787 billion program, the White House's Council of Economic Advisors - handpicked by the president himself - said they used "mainstream estimates of economic multipliers for the effects of fiscal stimulus" to reach their conclusions, noting that the stimulus added or saved just under 2.4 million jobs at a cost of $666 billion.
A quick calculator tabulation figures out to $278,000 per job.
To put that into perspective, it means the government quite simply could have handed a $100,000 check to everyone whose employment was supposedly made possible with stimulus dollars, and taxpayers would actually have come out about $427 billion ahead of the game.
"Furthermore, the council reports that, as of two quarters ago, the 'stimulus' had added or saved just under 2.7 million jobs -- or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the 'stimulus' than it has with it," said The Weekly Standard, in reviewing the council's conclusions. "In comparison to how things would otherwise have been, the 'stimulus' has been working in reverse over the past six months, causing the economy to shed jobs."
What's perhaps most incredible about this entire sad affair is that the administration actually increased the nation's debt in a vain attempt to reduce it. But that's what government does - it usually makes a problem worse, which is why government should not be in the business of trying to create business.
Consider that when the stimulus measure was passed, the national unemployment rate was 7.3 percent. As of this month, the nation's jobless rate is 9.1 percent, an increase of nearly 2 percent, and after more than half-a-trillion dollars have been spent to "create jobs."
Such government spending schemes - it takes tax money to create tax money - have long been discredited. The concept was first introduced in the 1930s by John Maynard Keynes, who posited that "market economies can get stuck in a deep rut and that only large infusions of government stimulus can revive growth," writes economists Ike Brannon, a former U.S. Treasury Department advisor, and Chris Edwards of the CATO Institute. But it's a myth, and the administration's stimulus failure was foreseen nearly two years ago.
"[T]he Obama administration's claim that its stimulus package will create up to four million jobs is outlandish," Brannon and Edwards wrote then. "The current stimulus plan would impose a large debt burden on young Americans, but would do little, if anything, to help the economy grow."
Seems they were right. The current Keynesian "stimulus" package has given Americans more debt without creating more jobs and improving the economy, just like they have done in the past.
Some things - and some bad ideas - never change.
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