Six months into the federal stimulus program, President Obama can boast that it was a big factor in moderating the "great recession" and has created or saved 600,000 to 1.1 million jobs, according to a new White House report.
But the program will have to create far more jobs before it replaces the 6.9 million jobs that have been lost since the recession began.
So far, the federal government has spent $151 billion – nearly a fifth of the $787 billion approved by Congress, according to the quarterly update from the White House Council of Economic Advisers released Thursday (click on the chart at right). The big spending on infrastructure projects has yet to kick in. Most of that money was spent on individual tax cuts and onetime $250 payments to seniors and veterans, state fiscal relief, and extended unemployment benefits and other extra social relief.
The results of that spending look impressive. The stimulus kept US gross domestic product, the output of goods and services, from falling an additional 2.3 percentage points (at an annual rate) in the second quarter. It may buoy third-quarter GDP even more, possibly kicking it into positive territory. But the report also emphasizes that the results are preliminary, based on a variety of economic estimates, rather than on hard data.
What's even less clear is the stimulus's impact on jobs. Talking up how many jobs are saved is politically savvy but, in the real world, practically impossible to pin down. "We do not observe what would have happened to the economy in the absence of policy," the report notes.
Translation: We're really guesstimating here.
Still, the guesstimates point in some interesting directions. The report suggests that the economy would have lost 300,000 to 500,000 more jobs in the second quarter without the stimulus. Using the bigger number, that would have meant job losses would have fallen by only 15 percent from the extreme levels seen in the first quarter.
Through August, the stimulus has created or saved 600,000 to 1.1 million jobs, the report says. Again, using the bigger number and subtracting second-quarter totals, that would have meant that the economy would still be losing jobs at the same rate as late spring (if no stimulus had been enacted in either period).
Bottom line: Without government help, we'd still be in deep doo-doo.
That's not an unsurprising conclusion from a White House study on a White House initiative. But here's the kicker: If you accept the high end of those employment guesstimates, then it's not at all clear that the economy will continue to improve once the stimulus ends.
The future looks brighter if you accept the lower job estimates: The private sector is creating new jobs. But then Mr. Obama's goal of the stimulus creating or saving 3 million to 4 million jobs over the next two years looks more in doubt.
If you believe the stimulus has done nothing to boost employment, then the US has just wasted $787 billion of taxpayer money, which is big even by Washington standards.
No one can contradict you whichever stance you take. The math of "coulda, woulda" employment is just too fuzzy.
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