David Freddoso: Stimulus benefits at least 14 percent phony, and counting
By: David Freddoso
Online Opinion Editor
November 26, 2009
California's state government said it took its share of stimulus money and saved 18,229 corrections jobs. But fewer than 5,000 of those jobs -- perhaps fewer than 1,000 -- were ever in any danger of being lost, according to a letter released this week by the state's auditor.
In Washington state, 24,000 teachers' jobs were reported as "saved," but none of their jobs were in jeopardy, either. The teachers in question had all been contracted through the end of the school year, and even though stimulus money was used to cover some of their pay, the governor's stimulus adviser concedes the stimulus did not "save" their jobs.
These are only two of the most egregious examples of stimulus job inflation from the administration's first cheery-eyed report on the stimulus at the beginning of this month. Between the jobs "created" on projects neither begun nor funded, the jobs "saved" that were never really in jeopardy and the jobs that were just reported erroneously, our staff has counted more than 90,500 bogus jobs in more than 100 American cities. (See our stimulus jobs map at WashingtonExaminer.com.)
These most obvious errors account for 14 percent (and counting) of the total 640,329 stimulus jobs reported by the administration.
Even if most errors in jobs reporting originated with the recipients of stimulus money and not with the federal government, President Obama has no one to blame but himself for the perception that his administration is making things up as it goes along -- and wasting a lot of money as he does so.
It was Obama who set the high expectations while pushing for his stimulus bill in February. Instead of following Washington's normal course and letting pork be spent quietly, he claimed his bill would create 3.5 million jobs by the end of 2010 and keep the unemployment rate below 8 percent.
It was he who he demanded reports on the number of jobs "created or saved" in order to create a perception of progress.
And after the first report came in -- 640,329 jobs! -- administration officials were quick to build on their own erroneous claim. Employing questionable multipliers, they estimated that each of the jobs directly "created or saved" came with an additional 0.72 jobs indirectly created or saved, for a total of 1.1 million.
From there, they further extrapolated more than 2 million jobs for next year so the stimulus is statistically on track to reach its goal.
Just one problem: The unemployment rate currently exceeds 10 percent, and all of these alleged new jobs are eluding the millions seeking work.
There is legitimate debate over whether fiscal stimulus can "create" jobs at all. When government borrows and spends on such a massive scale, it skews the trade deficit with foreign borrowers.
It absorbs domestic money into safe bonds when it might have otherwise been invested in productive business and home loans. It guarantees future tax increases that will stifle economic growth for the future generations who have to repay the interest.
We will never know how many jobs the stimulus package destroys for each one it "creates" or "saves." But we could follow the Obama administration's lead and just make up a number.
David Freddoso is an editorial page staff writer who can be reached at dfreddoso@washingtonexaminer.com.
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