Stimulus check: How many jobs?
You might be thinking, 'but didn't I see it reported last week that the CBO said the stimulus created 3.3 million new jobs?' Well, sort of. Including jobs switched from part-time to full-time (including overtime) gets a higher number than just estimating the number of hires. The CBO estimated that the stimulus created 'up to 3.3 million jobs' by that method. That's the high end. The low end was 500,000 jobs.
So according to the CBO formulas, the stimulus created between 0.5 million and 3.3 million jobs, but employed between 0.4 million and 2.4 million people - maybe.
How can the estimate of the number of people employed vary by the populations of Vermont and New Hampshire combined? Easily. The CBO isn't counting actual jobs. It's estimating them based on mathematical formulas. And those formulas, as Reason magazine's Peter Suderman has pointed out, assume that the stimulus spending has a net positive effect.
As Suderman reported, CBO Director Douglas Elmendorf was asked last year about the CBO's model for gauging stimulus success. He said the CBO is 'repeating the same exercises we [aleady] did rather than an independent check on it.' In other words, the CBO doesn't really provide an 'independent check' on stimulus job claims. Rather, every few months it plugs new numbers into a model that assumes job growth. The questioner, seeking clarification, responded: 'if the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis.' Elmendorf replied: 'That's right. That's right.'
So how many jobs has the stimulus actually created? We have no idea. But it did cost $825 billion. And the CBO predicts - using models favorable to the stimulus - that its positive effects (whatever they actually are) are fading and the burden of its debt soon will begin dragging the economy down. So, happy holidays.