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November 3rd, 2009
09:38 AM ET

Is it math or politics? Counting the cost of stimulus jobs

By Christine Romans

There is nothing more political, and fuzzy, than the math surrounding the massive $787 billion stimulus package. The administration says 640,000 jobs have been saved or created by the stimulus. That's based on $159 billion in contracts to states for roadwork, bridges, and to keep teachers in the classroom.

Using very simple math, that means taxpayers have spent about $248 thousand per job the White House says were saved or created.

$159,000,000,000 spending ÷ 640,329 jobs saved/created = $248,309 per job

Critics of the stimulus will say it shows taxpayers are getting a raw deal.

But like everything surrounding this stimulus, it is not as simple as that. And a White House economist told ABC such math is quote "calculator abuse."

Why? These are just jobs created to date. These projects will keep creating more jobs, so this cost per job number will only go down over time. The money obviously is not simply down the drain – it's creating economic activity and reflects wages, but also, supplies that are ordered, and materials manufactured, equipment rental, etc.

Still, there is an obsession with quantifying the cost to taxpayers of these jobs.

The White House has its own formula for that.

Government spending $92,136 per job-year
Tax cuts $145,351 per job-year
State fiscal relief $116,603 per job-year

Source: White House

Once the stimulus is fully deployed and working, taxpayers will have spent $92,000 per job.

You can read more of the White House Council of Economic Advisers’ math here.

All the subsequent job and cost counting is as much politics as mathematics. Supporters of the stimulus want to highlight new and saved jobs. They will say the economy is now growing again because of the stimulus spending. Opponents will say it costs too much, there is too much waste, and our grandchildren will pay for it later.

We may never know exactly how many jobs have been created or how long they will last. We will never have a list of three to four million American names who have benefited from the stimulus. But what is certain? I can tell you that $787 billion will be spent over the next two years, and political bickering over its effectiveness has just begun.

Filed under: Economy
soundoff (6 Responses)
  1. nancy

    $159,000,000,000 spending ÷ 640,329 jobs saved/created = $248,309 per job

    Might as well just give everyone unemployed that amount of money.

    November 4, 2009 at 1:35 pm |
  2. jim vicalvi

    When you figure out how much these people in Congress pay to get their "positions" [won't dignify them and call them jobs] in Congress should anyone be surprised. These turkeys should only get together for 1 week every 3 or 4 months to see if there is anything REALLY important that needs to be addressed. That's about all of the time that they actually do anything important. That would save untold millions of dollars in wasted money on offices and staff.

    November 4, 2009 at 9:15 am |
  3. Terry, TX

    Another trillion dollars of borrowed China money.....for nothing.....and the lie of "saved" jobs doesn't pass the smell is CREATED jobs....
    who do they are talking to. They LIE.

    November 4, 2009 at 8:00 am |
  4. bob bechtel

    just more government wast of tax payer money. It did nothingto help the people in this state washington only help wallstreet and the banks and the rich . what happened to for the people by the people . If the people let the banks and big companies fall then wallstreet falls and then washington falls. Then all will be good again ! Washington does not speak for the people it seaks for the rich

    November 4, 2009 at 7:53 am |
  5. Mitchell

    Sure I believe the White House on this one. Just like I believe they are not on the fast track to bankrupting America. Socolism and a bankrupt America is not quite the change that I expected.

    November 3, 2009 at 10:58 am |
  6. Deb

    I am so tired of hearing how bad the airlines are! Why should airlines be responsible for providing discounted transportation to people who have experienced a death in the family? Do car rental companies provide a discount? How about hotels? Restaurants? Further, you always, always, always talk about airline fees. Christine Romans, do you always enjoy a limo ride or do you ever rent a car like the rest of us working people. The fees practically double the cost of the car rental! The same thing with hotels. So how about you be a real journalist and stop reporting the same old tired stories. It may take some effort on your part, but isn't that your job?

    November 3, 2009 at 10:49 am |