Dem's Stimulus Plan Costs $278k per Job

[woolfe9999]

Why did the OP's source state the job figure for the stimulus as 2.4 million when the report says 2.5-3.6?

http://www.whitehouse.gov/sites/default/files/microsites/20110318-cea-arra-report.pdf

 

[marincounty]

Bush's stimulus plan-war, costs over $1 million per soldier per year.
What we need is a depression era jobs program, but of course righties would never allow that.

 

[Matt1970]

Yep, they haven't mentioned that the current economic disaster was created under Bush tax rates which we were told by Republicans would stimulate the economy, and which we are still told we need to keep in order to stimulate a recovery.

So a low tax rate caused the current recession? That makes absolutely no sense whatsoever.

 

[Matt1970]

Tax cuts at the top do create jobs- just not in this country. Capitalists just have more money to automate & offshore.

And corporations will continue to "ship jobs overseas" until America gets it's pride back and stops buying everything it can get it's hands on that was Made In China. You can have all the jobs you want here but the vast majority of American made products just don't sell.

How many of you people bought American flags over the weekend for 4th of July that were Made In China? Disgusting......

 

[Engineer]

So a low tax rate caused the current recession? That makes absolutely no sense whatsoever.

That's not what he said. He stated that the situation started while the low tax rates were in place and that the lower tax rates did nothing to stop it. No mention of the lower tax rates actually creating the situation we are in.

Of course, it could be argued that without the lower tax rates, it would have been much worse...but to argue that, one would have to allow the argument that without the stimulus, the situation would be much worse.

 

[Jhhnn]

So a low tax rate caused the current recession? That makes absolutely no sense whatsoever.

Sustained ultra low tax rates at the top created a situation where there was too much money chasing too few returns, the classic recipe for a credit bubble. Demand for securities, debt instruments was huge, so bankers met that demand lending to everybody & their dog. That hasn't really changed, except that having looted America, the Banksters & hangers-ons are now speculating elsewhere through the dollar carry trade. It's not like they're faithful partners- they'll screw anybody.

 

[brencat]

Sustained ultra low tax rates at the top created a situation where there was too much money chasing too few returns, the classic recipe for a credit bubble. Demand for securities, debt instruments was huge, so bankers met that demand lending to everybody & their dog. That hasn't really changed, except that having looted America, the Banksters & hangers-ons are now speculating elsewhere through the dollar carry trade. It's not like they're faithful partners- they'll screw anybody.

That's not correct. It's actually too low interest rates that create a necessity to gamble because you can't earn an honest return by keeping your money in the bank. Who is willing to accept a dogshit interest rate of 0.5%? The classic 'search for yield' begins once every stock and high yield instrument is bid up beyond fair value...like now. Combine that with leverage and derivatives designed to boost returns (once again due to too low yields on 'safer' stuff) and you have bubble after bubble after bubble.

Nobody can convince me otherwise that the root of all our problems the past 7 years or so hasn't been cheap money. The Fed should never set rates below 2.5-3%, ever.

 

[ProfJohn]

Also according to this link
http://www.irs.gov/pub/irs-soi/08in03etr.xls

The top 0.1% have a lower average tax rate than the top 1%. This happened in 2004. Couldn't possibly be because of the lowered capital gains tax huh?

Yes.

It is only the very tip that has the lower total income paid due to them paying the capital gains rate instead of income.

If you look at sources of income it is only a very small percent of Americans who have a large enough portion of their income come from capital gains that they pay a lower tax rate than people below them.

I guess you could fix it by putting into place some kind of progressive capital gains rate that kicks in at a certain amount. But I don't know if that is workable or if it would have a negative impact on capitals gain activity and thus hurt the economy.

 

[ProfJohn]

That's the pale blue part in the middle of the graph.

That is a bogus statement.

Spending under Obama has gone up by $600 billion. That chart does not show $600 billion in the blue area.

Think of it this way.
In 2008 we spent $2.9 trillion and had $2.5 trillion in revenue for a $450 billion deficit.

In 2010 we spent $3.4 trillion and had $2.1 trillion in revenue for a $1,293 billion deficit.

The difference in between the two years is $843 billion.
Of that $400 billion is from less taxes and $450 billion is from more spending.
That $450 billion of spending is all Obama. Meaning that one third of that deficit was created by Obama's spending alone.

And in case you didn't know the Bush tax cuts are only costing us around $120 billion a year. Less than 10% of that deficit. Another $120 billion or so is the cost of the war. So now we are up to 20% of the deficit being the war and tax cuts.

So roughly, the 2010 budget deficit was 33% reduced revenue, 20% tax cuts and wars, 33% Obama spending and 13% of stuff.

You guys keep forgetting that the boost in spending under Obama has been insane. At least $600 billion MORE than what Bush was spending. That is more than double the cost of the wars and the Bush tax cuts.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

 

[fskimospy]

That is a bogus statement.

Spending under Obama has gone up by $600 billion. That chart does not show $600 billion in the blue area.

Think of it this way.
In 2008 we spent $2.9 trillion and had $2.5 trillion in revenue for a $450 billion deficit.

In 2010 we spent $3.4 trillion and had $2.1 trillion in revenue for a $1,293 billion deficit.

The difference in between the two years is $843 billion.
Of that $400 billion is from less taxes and $450 billion is from more spending.
That $450 billion of spending is all Obama. Meaning that one third of that deficit was created by Obama's spending alone.

And in case you didn't know the Bush tax cuts are only costing us around $120 billion a year. Less than 10% of that deficit. Another $120 billion or so is the cost of the war. So now we are up to 20% of the deficit being the war and tax cuts.

So roughly, the 2010 budget deficit was 33% reduced revenue, 20% tax cuts and wars, 33% Obama spending and 13% of stuff.

You guys keep forgetting that the boost in spending under Obama has been insane. At least $600 billion MORE than what Bush was spending. That is more than double the cost of the wars and the Bush tax cuts.

Do you seriously have this little memory? You have already been educated in other threads about the source of those increases in spending, and how little they had to do with Obama. Did you forget those threads happened? Did you not read them? Are you being deliberately deceitful? Which is it?

 

[ProfJohn]

Bush's stimulus plan-war, costs over $1 million per soldier per year.
What we need is a depression era jobs program, but of course righties would never allow that.

Of course not, because it would be stupid. In the 1930's you hired 200 people and handed them some shovel and had them build a road.

Today you hire a dozen people who drive $100,000 truck and build the same road in half the time.

The 1930 jobs thing won't work with our current economy and construction techniques.

 

[woolfe9999]

That is a bogus statement.

Spending under Obama has gone up by $600 billion. That chart does not show $600 billion in the blue area.

Think of it this way.
In 2008 we spent $2.9 trillion and had $2.5 trillion in revenue for a $450 billion deficit.

In 2010 we spent $3.4 trillion and had $2.1 trillion in revenue for a $1,293 billion deficit.

The difference in between the two years is $843 billion.
Of that $400 billion is from less taxes and $450 billion is from more spending.
That $450 billion of spending is all Obama. Meaning that one third of that deficit was created by Obama's spending alone.

And in case you didn't know the Bush tax cuts are only costing us around $120 billion a year. Less than 10% of that deficit. Another $120 billion or so is the cost of the war. So now we are up to 20% of the deficit being the war and tax cuts.

So roughly, the 2010 budget deficit was 33% reduced revenue, 20% tax cuts and wars, 33% Obama spending and 13% of stuff.

You guys keep forgetting that the boost in spending under Obama has been insane. At least $600 billion MORE than what Bush was spending. That is more than double the cost of the wars and the Bush tax cuts.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

Hey PJ, what is "Obama" spending money on that Bush wasn't spending money on? Please be specific. There's plenty of information out there that breaks these numbers down further so that we can track how much additional spending is the result of Obama policies versus, say, an increase in mandatory spending that is a result of the recession. So tell us, what new spending, other than the one time stimulus bill, has Obama introduced?

 

[Acanthus]

Of course not, because it would be stupid. In the 1930's you hired 200 people and handed them some shovel and had them build a road.

Today you hire a dozen people who drive $100,000 truck and build the same road in half the time.

The 1930 jobs thing won't work with our current economy and construction techniques.

You could still use unskilled labor to pick up trash, fill potholes, paint federal / state buildings, general office work, ditch digging, beach cleanups after storms, carting the old and disabled around town, hell, make a program to send them up to ND to mine silver. You can come up with shit for unskilled workers to do.

Why didn't we send 50k Americans over to Japan to help with the tsunami cleanup? They are a strong ally of the United States and could have certainly used the help, and we could have certainly used the work.

 

[MooseNSquirrel]

Hey genius here is the report written by Obama's team.
http://www.whitehouse.gov/sites/default/files/cea_7th_arra_report.pdf
It is only 16 pages long, go read it.

Straight from the report:
"As of the first quarter of 2011, the report estimates that the Recovery Act raised employment by 2.4 to 3.6 million jobs relative to what it otherwise would have been."

Do the math.
$666 billion divided by 3.6 million jobs equals $185,000 per job at best estimate.

We could have sent every person living in this country a check for $2,000 and probably got a better result.

Or think of it this way...
There is around 13 million unemployed Americans. We could have sent each of them a check for $50,000.

The bottom line is that the stimulus worked, but it cost too much per job saved.

That math only work in a vacuum. What you and the OP don't mention is the total number jobs that might have been lost without the stimulus. Calculating net jobs gained is a fools game.

So what we are left with is a broad generalization saying that without the stimulus the job market would have cratered instead of just being horrible.

 

[ProfJohn]

Let's see...
These numbers are from Obama's proposed 2010 budgets.
2010
Mandatory spending: $2.173 trillion (+14.9&#37
Discretionary spending: $1.378 trillion (+13.8%)

So in 2010 Obama wanted to increase discretionary spending by 13%

Here is the numbers from 2009 (assuming the bill passed as stated)
http://online.wsj.com/article/SB123509103655828373.html
"The "omnibus" bill would increase discretionary spending -- funds for programs that aren't benefits like Social Security and Medicare -- by 8.7% over 2008. "This would be the largest increase in discretionary spending since at least 1978 -- with the exception of a 10% boost in 2002, shortly after the Sept. 11 attacks "
And that was above any spending in the stimulus.

Here is another source on discretionary spending under Obama. I edited out a LOT of junk so you should click link to get the whole story.
http://www.politifact.com/virginia/...antor-says-discretionary-spending-20-percent/

The numbers show non-defense discretionary spending rose from $434 billion in fiscal 2008 to $537 billion in fiscal 2010. That’s a 23.7 percent jump...-snip-

In the eight federal budgets approved during Republican George W. Bush’s administration -- non-defense discretionary spending increased by an average 9.6 percent each year. During the first two years of the Obama administration, it has grown by an annual average of 11.9 percent... -snip-

That suggests that when you add in the stimulus, discretionary spending increased 44 percent during the first two years of the Obama administration -- not "over 80 percent" as Cantor says.

So Obama's spending is worse than Bush, now what?

 

[Acanthus]

Let's see...
These numbers are from Obama's proposed 2010 budgets.
2010
Mandatory spending: $2.173 trillion (+14.9&#37
Discretionary spending: $1.378 trillion (+13.8%)

So in 2010 Obama wanted to increase discretionary spending by 13%

Here is the numbers from 2009 (assuming the bill passed as stated)
http://online.wsj.com/article/SB123509103655828373.html
"The "omnibus" bill would increase discretionary spending -- funds for programs that aren't benefits like Social Security and Medicare -- by 8.7% over 2008. "This would be the largest increase in discretionary spending since at least 1978 -- with the exception of a 10% boost in 2002, shortly after the Sept. 11 attacks "
And that was above any spending in the stimulus.

Here is another source on discretionary spending under Obama. I edited out a LOT of junk so you should click link to get the whole story.
http://www.politifact.com/virginia/...antor-says-discretionary-spending-20-percent/

So Obama's spending is worse than Bush, now what?

How much has the population changed vs ~2000? That would explain some of it.

Also consider that the boomers retiring is going to hit SS and medicare hard.

Where is the discretionary spending going? From your link...

It goes for services such as defense, education, health and housing.

Defense spending is up, we are in two (3?) wars. Education is obviously a large expense right now because college enrollment is up, and they did cut the two pells program to help reduce college costs, as well as cut out the middleman on federally backed subsidized and unsubsidized loans. Health? Obviously that is up because we have universal health insurance pools building up from federal contributions. Housing? You know about Fannie and Freddie right?

I don't see what is unreasonable about any of these things being on the rise. The reasons are obvious.

 

[ProfJohn]

That math only work in a vacuum. What you and the OP don't mention is the total number jobs that might have been lost without the stimulus. Calculating net jobs gained is a fools game.

So what we are left with is a broad generalization saying that without the stimulus the job market would have cratered instead of just being horrible.

The numbers I used do work.

The government itself claims that at best the stimulus created/saved 3.6 million jobs at a cost of $666 billion or $150,000 per job. And that is the highest guess on jobs created.

So the stimulus cost a ton of money per job.

Now beyond the above everything else is a best guess. Would the economy rebounded without the stimulus? Would unemployment have rebounded on its own etc etc etc? We don't really know.

But we do know that if everything the Obama people said about the stimulus is true then the stimulus was not a very efficient way to create jobs.

Of course there were other benefits to the stimulus such as roads etc etc. Not sure how much was spent on that vs wasted on other crap.

 

[Acanthus]

The numbers I used do work.

The government itself claims that at best the stimulus created/saved 3.6 million jobs at a cost of $666 billion or $150,000 per job. And that is the highest guess on jobs created.

So the stimulus cost a ton of money per job.

Now beyond the above everything else is a best guess. Would the economy rebounded without the stimulus? Would unemployment have rebounded on its own etc etc etc? We don't really know.

But we do know that if everything the Obama people said about the stimulus is true then the stimulus was not a very efficient way to create jobs.

Of course there were other benefits to the stimulus such as roads etc etc. Not sure how much was spent on that vs wasted on other crap.

It would have been far more effective if it wasn't half tax cuts.

 

[ProfJohn]

Defense spending is up, we are in two (3?) wars. Education is obviously a large expense right now because college enrollment is up, and they did cut the two pells program to help reduce college costs, as well as cut out the middleman on federally backed subsidized and unsubsidized loans. Health? Obviously that is up because we have universal health insurance pools building up from federal contributions. Housing? You know about Fannie and Freddie right?

I don't see what is unreasonable about any of these things being on the rise. The reasons are obvious.

The last quote was non-defense discretionary which has jumped faster under Obama than it did under Bush and if I remember correctly the people in this forum raised hell about Bush's spending.

But now that it is Obama doing the spending it is okay. Did I get that right?

 

[ProfJohn]

It would have been far more effective if it wasn't half tax cuts.

That $666 billion was spending alone. Did not include the tax cut part.

Would you like some more straw? Or are you out yet?

 

[Acanthus]

The last quote was non-defense discretionary which has jumped faster under Obama than it did under Bush and if I remember correctly the people in this forum raised hell about Bush's spending.

But now that it is Obama doing the spending it is okay. Did I get that right?

I think the major complaint is that these changes are not "paid for" with tax increases, thus creating the large deficits we are seeing today.

Neither Bush nor Obama are safe from this criticism. Ending the Bush tax cuts would have gone a long way to closing the gap.

Again, the education, healthcare, and housing increases all make sense when the recession and universal health insurance are considered.

 

[Acanthus]

That $666 billion was spending alone. Did not include the tax cut part.

Would you like some more straw? Or are you out yet?

I wasn't trying to derail your argument, just stating a fact. More jobs would have been generated via direct spending.

I would say $150k is a bit on the high side for the cost of the jobs, but you have to consider the cost of the hiring process, the cost of administration of the funds, the cost of transparency measures in the law, the workers wages and their lean for 6 months to 2 years.

I don't think it is too far out in left field.

 

[ProfJohn]

I wasn't trying to derail your argument, just stating a fact. More jobs would have been generated via direct spending.

I would say $150k is a bit on the high side for the cost of the jobs, but you have to consider the cost of the hiring process, the cost of administration of the funds, the cost of transparency measures in the law, the workers wages and their lean for 6 months to 2 years.

I don't think it is too far out in left field.

What we don't really know if how much of that spend went to expensive crap that we could have skipped out on such as "$900,000 for the Adler Planetarium for the "overhead projector"

What if we had spent that money on roads instead?

 

[ProfJohn]

The real shame is that we didn't see the slowdown coming and start lining up the projects in 2007 or 2008. Instead of a giant bill in 2009 we could have passed a $100 billion in 2007+2008 and perhaps staved off some of the effects of the recession.

 

[Acanthus]

What we don't really know if how much of that spend went to expensive crap that we could have skipped out on such as "$900,000 for the Adler Planetarium for the "overhead projector"

What if we had spent that money on roads instead?

Wasn't that a bipartisan addition to ARRA that McCain got in hot water over commenting on?

Having been to the Adler planetarium (it is wonderful), iirc this struck a personal note with me. The planetariums current revamp has revitalized the place. They raised over $12m in funds from public donors. IIRC $750k came from IL and 900k came from ARRA.

It is a historic icon in the US and Chicago both. It was the 1st planetarium in the US and is the oldest one in the western hemisphere. The renovation did put people to work as well, they renovated the entire building and its contents.