Obama’s jobs plan: $447 billion for one decent month of employment growth

The headline is “Obama Jobs Plan May Prevent 2012 Recession.” But the story Bloomberg published, based on its survey of economists about the president’s $447 billion proposal, is best summarized by the second paragraph:

The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said.

For those keeping score at home, that’s a “jobs plan” that costs more than $1.6 million per job. If the president wants to spend taxpayer dollars to provoke demand-side job creation, he would be better off holding a lottery and giving $10,000 apiece to 45 million people.

Worse, the Economic Policy Institute earlier this year estimated it would take job growth of 285,000 per month, every month for the next five years, for the economy to return to the pre-recession unemployment rate. That was after February’s job-growth numbers came out; job growth has come in well below 285,000 every month since then. (It was zero in August, in case you forgot.)

So, President Obama wants to spend $447 billion to speed up the recovery process by one month. Or, rather, the better part of one month.

The White House, according to Bloomberg, prefers to cite economists who say the plan would boost hiring by 1 million. But for every economist in the survey that says the plan would perform that well, there’s another who says it won’t produce any net new jobs. [This sentence has been edited from the original; see explanation in my comment at 11:20 a.m. -- KW]

Oh, and that line about the plan keeping us out of a recession next year? If 0.6 percent of GDP is the difference between being in a recession and staying out of one, we’re in for a rough 2012.

– By Kyle Wingfield

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163 comments Add your comment

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

September 28th, 2011
9:11 am

Romney, Perry, Paul pull in cash – Other GOP hopefuls struggling, running out of money.bHerman Cain, the former pizza company executive, has loaned himself hundreds of thousands of dollars so he can keep running.-Urinal

Date- 9/28/11

Pay to the Order of- Herman Cain

Amount- $2,400

Signed- The Duh Report

Thanks for the information, AJC!

JKL2

September 28th, 2011
9:14 am

Keep those printing presses rolling. Free pesos for everyone!

Don’t forget to raise the minimun wage up to $20/hr while we’re at it. Then everyone could have a “good” job.

Now with Ten Percent More Flavor

September 28th, 2011
9:20 am

The Republican job plan:

Step 1. zzzzzzzzzzzz.
Step 2. We could use unemployment to attack Obama.
Step 3. We need jobs and jobs is our Number One priority.
Step 4. Why hasn’t Obama created jobs.
Step 5. Obama wants to tax the job creators.
Step 6. Vote Republican and we will divert Medicaid money to pay for unemployment benefits.
Step 7. Vote Republican and we will reduce unemployment benefits that harm corporations.
Step 8. Vote Republican so we can keep our jobs.

Now with Ten Percent More Flavor

September 28th, 2011
9:28 am

If Peter Piper picked a peck of job creators,
How many pecks of job creators would Peter Piper have to pick,
To pack a peck of jobs in Peter Piper’s peck.

Kyle's disingenuousness knows no bounds

September 28th, 2011
9:45 am

Congrats, Kyle. Once again you present us with a short, poorly conceived article citing cherry picked stats that do nothing but obfuscate. Here’s a suggestion: instead of baseless attacks, why not use your brilliant economic awesomeness to posit how you would fix the economy if you were Prez? And I’d like something beyond the standard vacuous platitudes of no taxes, no regs and no govt. I’d like specifics and data to show why your plan would work. Go on – I dare ya!

Now with Ten Percent More Flavor

September 28th, 2011
9:49 am

Tax cuts account for more than half the dollar value of the Obama plan, which also includes $105 billion in spending for school modernization, transportation projects and rehabilitation of vacant properties, according to a White House fact sheet. The proposal includes $35 billion in direct aid to state and local governments to stem dismissals of educators and emergency personnel.

And the great thing is that the house Republicans have a rule that tax cuts do not require a corresponding spending cut because every good Republican knows that tax cuts do not need corresponding spending cuts. I think it is written in the bylaws of being a Republican or something like that, right Kyle. So, Obama made it real easy for the Republicans by creating jobs that are not only paid for in the legislation but half paid for with a tax cut. Rejoice with us, Kyle.

Independence and Employed

September 28th, 2011
9:54 am

The summary is 280k to 1million job would be created with Obama’s Job plan. With everything that’s being said, we need a Job Bill NOW. Obama’s job act is not perfect, but, we have to act NOW.

Better die from trying than not trying at all. I felt that some of these politicians has no idea in regarding to what’s out there.

dw

September 28th, 2011
9:55 am

I actually agree with Kyle on this one. WHEN will the country wake up and realize that the economy is NOT a usa problem… it is a WORLD problem. Its not going to get better until the next internet or housing boom comes along! Quit expecting stupid politicians to fix it overnight retards……..

Ayn Rant

September 28th, 2011
9:57 am

Right-wing voodoo economics is just bad arithmetic.

When you pour money into the pockets of working people who will spend it, you spur consumer demand that will provide opportunities for profitable investment in job-creating enterprises. It’s inevitable; there’s nowhere else the money can go. Put $100,000 in and you get one job for one year, or support 1% of a hundred jobs for one year.

Kyle’s voodoo economics is outright deception: he divides the entire cost of the job creation program into a right-wing “estimate” of the number of jobs that will be created in 2012. The job-creating proposal by the President creates jobs over several years to come; it would initiate, not complete, the investment projects in 2012.

President Obama’s job creation plan is the only one on the table. Ignore it if you are content with the present economic stagnation, or fool enough to believe that repeating the same mistakes that caused the economic blow-out will jolt the economy to life.

Bart Abel

September 28th, 2011
10:00 am

RE: “So, President Obama wants to spend $447 billion to speed up the recovery process by one month.”
———————————-
Readers wouldn’t know it from reading this post, so I thought that it’s worth pointing out that more than half of the American Jobs Act proposal is made up of tax cuts.

Kyle also made the mistake of writing that one out of three economists predict that the American Jobs Act won’t produce any “net new jobs”. That’s not correct either. Bloomberg reported that this data measures the number of workers that employers would “add or keep” as a result of this jobs proposal. “Net new jobs” is not the same as “add or keep”.

Now, here’s the problem. The median statistics that Kyle relies on above are misleading because they’re reporting medians from a survey in which some economists mysteriously reported that the legislation would “add or keep” zero jobs. One doesn’t have to be an economist to know that that is arithmetically impossible. I repeat…impossible! You can’t hire tens of thousands of construction workers to repair schools, roads, and bridges, and then somehow claim no jobs were saved or created.

In short, this survey is flawed.

BULLSEYE

September 28th, 2011
10:01 am

The definition of insanity

September 28th, 2011
10:06 am

Stimulus 1 didn’t work and yet the liberals on here think a stimulus 2 would work. Sometimes you wonder if the liberals have just gone insane. Repeating the same mistake over and over and expecting different results- insanity.

Lost and found department

September 28th, 2011
10:08 am

Somewhere in Chicago a community has lost its organizer. Will someone please return the organizer to his community.

BULLSEYE

September 28th, 2011
10:09 am

Kyle Wingfield

September 28th, 2011
10:11 am

Independence: No, the summary is that zero to 1 million jobs would be created — and there are a lot more of Bloomberg’s economists predicting zero than there are predicting 1 million.

Bart: Fine, so they would “add or keep” zero. Does that really make you feel better? As for the part about the bill including tax cuts: I’ve long said not all tax cuts are created equal from an economic perspective.

[...] PostEconomists: Obama plan would hold off recessionPoliticoObama Encourages Learning to StudentsTIMEAtlanta Journal Constitution (blog) -ABC Newsall 929 news [...]

Ragnar Danneskjöld

September 28th, 2011
10:13 am

Looks like Kyle rattled the cage of the leftist loons. If you want to grow the US economy, just undo everything that has happened since the democrats took control of Congress in January 2007. In fact, if you really want the economy to roar, just undo everything Congress has done since 1969.

Class of '98

September 28th, 2011
10:16 am

The mentality of a liberal: “Better die from trying than not trying at all.”

These are the same people, who if they were lost in the woods, would think there best option to find safety would be to simply run faster. They think the direction in which they run doesn’t matter.

It matters. It matters.

Bart Abel

September 28th, 2011
10:17 am

Thanks for the correction, Kyle. But to be clear, arguing that all tax cuts are the same is not equivalent to reporting as if they don’t exist.

And no, the surveys indicated that the American Jobs Act would not add or keep zero jobs doesn’t make me feel better…or worse. It tells me that the survey is flawed, because as I said, that would be mathematically impossible.

Bart Abel

September 28th, 2011
10:18 am

Correction: …arguing that all tax cuts are NOT the same is not equivalent to reporting as if they don’t exist.

BULLSEYE

September 28th, 2011
10:20 am

Kyle Wingfield

September 28th, 2011
10:22 am

Bart: What I reported is that Obama has a plan with a price tag of $447 billion, and the median-case projection is that it would create or “save” 275,000 jobs. That’s the story here.

carlosgvv

September 28th, 2011
10:23 am

One more time – Obama is The President of The United States, not the KING. He shares power with the Congress and The Supreme Court and job creation is not really a part of his job description. To make matters worse, he is saddled with a poison Tea Party Congress who would rather let America slide into third world status than help him succeed at anything.

dw

September 28th, 2011
10:26 am

WE LIVE IN A WORLD ECONOMY… it doesnt matter who is POTUS. The world economy is screwed right now. Hiking taxes or cutting taxes in the usa is not going to make a lick of difference

Maintaining Sanity in Today's World

September 28th, 2011
10:30 am

Kyle

and what infrastructure do we get for free along with those very expensive jobs?

Bart Abel

September 28th, 2011
10:38 am

Kyle,

I was referring to this line from your post (emphasis mine): “President Obama wants to SPEND $447 billion to speed up the recovery process by one month.” However, the word “spend” also included about $245 billion in tax cuts. My complaint is that, in my opinion, your silence on these tax cuts leaves readers confused.

Kyle Wingfield

September 28th, 2011
10:40 am

Maintaining: I knew someone would bring that up. Of course part of the expense covers construction costs, etc. But the president isn’t selling an infrastructure plan. He’s selling a jobs plan. Unlike his first stimulus, this isn’t a recovery and *reinvestment* act. It’s supposed to be a jobs, jobs, jobs bill. So, the idea should be to create as many jobs as quickly as possible. And, as he’s admitted many times before, these jobs aren’t really shovel-ready…which means his plan would be neither quick nor, getting back to the economic forecasts, effective at job creation.

Like I said, if the point is to dump a bunch of money in the economy, this isn’t even the best way to do that.

JF McNamara

September 28th, 2011
10:43 am

Isn’t this a failure in Republican policies? The jobs plan is 55% tax cuts, and Republicans are saying its expensive and will fail. Its 31% infrastructure and local aid, 14% unemployment, and the rest (55%) is tax cuts. Tax cuts, by far, are what the plan is about.

I guess tax cuts don’t actually work. Thanks for finally acknowledging your own dumb propaganda is a lie.

You need to make the change, “Tax cut plan” that costs more than $1.6 million per job.

Maintaining Sanity in Today's World

September 28th, 2011
10:43 am

Kyle,

If you knew someone would bring it up why not address it? Do you find it shameful that his jobs plan manages to do both?

Please enlighten us as to what “the best way to do it is”.

Maintaining Sanity in Today's World

September 28th, 2011
10:44 am

Kyle,

One other thought. Would you have preferred we spent that much money and got no infrastructure for it?

Check these stats

September 28th, 2011
10:46 am

And the republicans job plan? Cut the corporate tax rate to $0, cut *entitlements* that people have actually paid into their entire working lives, no spending on anything but free market subsidies to big business (snark) and more money to defense contractors.

Michael Marr

September 28th, 2011
10:48 am

In the last stimulus, didn’t teachers, cops and other govt employees get an extra $25 per week in their paychecks and these counted as “jobs”?

JDW

September 28th, 2011
10:49 am

Well Kyle I agree that the plan is less efficient than I would like The main problem is that it was conceived to put something on the table that could be passed by Repugicans. Therefore it is loaded up with inefficient job creating costs such as tax cuts rather than things that could really help like funding for new businesses, more infrastructure spending or energy R&D.

Now to your “cherry picking” and down right misrepresentation of the facts. What Bloomberg actually said was:

“President Barack Obama’s $447 billion jobs plan would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year”

They went on to say:

“The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said.”

Where you err (mislead :shock: ) is in doing your math using zero as the baseline. For example doing nothing:

“would cut GDP by 1.7 percent in 2012, according to JPMorgan Chase & Co. chief U.S. economist Michael Feroli in New York”

So the net impact on GDP is actually in the 2.3% range rather than .6%. Sounds like a bit better investment now doesn’t it?

Quick Critic

September 28th, 2011
10:53 am

Let me see if I have this straight. Bloomberg publishes this story that Kyle doesn’t like or agree with, so we have this blog debate. Kyle says – “But for every economist in the survey that says the plan would perform that well, there are three who say it won’t produce any net new jobs.”

Here’s my two cents… (1) Kyle what your source that states a 3-to-1 ratio say it won’t produce any? new jobs” We cannot just make stuff up here, if this criticism by Kyle is credible, we’ve got to a source, not an opinion. (2) Bloomberg publised the story. (3) BLOOMBERG published the story. (4) Kyle isn’t employed by Bloomberg. This is equivilent to my coaching my 8 year old in baseball and writing about how Bobby Cox failed as a MLB manager in his later years.

Just my two cents – but this doesn’t hold any water or with the criticism without a source on the 3-to-1 ratio. (Fox News is not a credible source.)

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

September 28th, 2011
10:54 am

With the Urinal offering opinion “from the right” through David Brooks and Kathleen Parker, it just goes to show you that the AJC wouldn’t know Conservatism if they fell over it.

freaking ate up liberals…

c

September 28th, 2011
10:55 am

WOW at the amount of stupid posts on this blog. You Obama lovers have no clue what you’re talking about. Keep up the good work Kyle. These idiots can’t handle the truth

Yahtzee

September 28th, 2011
10:57 am

Obama is a clown.

John

September 28th, 2011
11:00 am

I’m pretty close to being a yellow dog democrat; I’m pro-choice, don’t oppose gay marriage, strongly believe that pollution is contributing to global warming, and am generally not pro-big business. But, if the economy doesn’t improve markedly over the next 13 months I’ll in all likelihood be willing to give someone like Romney a good hard look. (NOT, however, Palin or Bachmann or Perry.)

Kyle Wingfield

September 28th, 2011
11:02 am

JF: The only propaganda at play is the notion that I or any other informed conservative believes all tax cuts work equally well. Do some Republican politicians say that out of ignorance, or simply to pander? Sure. But it is a misunderstanding or misrepresentation of the economics.

JDW: Speaking of cherry-picking…you cite the opinion of one economist out of 34 and claim I’ve misrepresented the story. I could just as easily cite this quote a few paragraphs later:

“ ‘It’s not really going to have anything more than a marginal impact,’ said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. ‘It’s just maintaining the status quo: extending the payroll-tax cuts and unemployment benefits. The bulk of the money is going to go to firms that would’ve hired anyway.’

“Stanley estimated the program would increase payrolls by 50,000 and add 0.25 percent to GDP next year.”

That’s why they survey a range of economists and report the medians. To avoid the exact kind of cherry-picking you did.

Gen. MacArthur

September 28th, 2011
11:04 am

Kyle, nobody cares what economists thinks. Where have ALL these expert economists been all this time? And to think that these economist have summarized the entire plan in one itty bitty paragraph shows that nobody know what they’re doing. The only people who know how to grow an economy are the Chinese. Keep sending money there at your own peril.

Kyle Wingfield

September 28th, 2011
11:04 am

Quick Critic: Maybe you’re a little too quick on the draw. My source is the list of economists at the bottom of the Bloomberg article…which shows the individual predictions for each of the 34 economists.

Maintaining Sanity in Today's World

September 28th, 2011
11:07 am

“But for every economist in the survey that says the plan would perform that well, there are three who say it won’t produce any net new jobs.”

Please name them.

peachie

September 28th, 2011
11:08 am

Right-wing voodoo economics is just bad arithmetic.

>>When you pour money into the pockets of working people who will spend it, you spur consumer demand that will provide opportunities for profitable investment in job-creating enterprises. It’s inevitable; there’s nowhere else the money can go.<<

Actually there is, many pay down credit card balances which creates no new demand

Mike

September 28th, 2011
11:09 am

So give me an idea then buddy … oh I know.

1) Cut Spending (has no influence on me)
2) Lower taxes on the Job creators (which I’m technically included in. Thanks for the extra income, but I’m giving that to my family, not putting it in a pool to create a job)
3) Clear regulations (so me filling out less paperwork will give me an incentive to hire someone.)

Whatever dude. I’m good.

Maintaining Sanity in Today's World

September 28th, 2011
11:11 am

AIG? Goldman Sachs?

blkshepherd

September 28th, 2011
11:13 am

Kyle Wingfield

you along with others on here that Agree with you(I certainly don’t) remind me of the Adults in the Charlie Brown cartoon series..WAH WAH WAH WAH..you CRY like Babies constantly.

Suggestion, your not happy with the current President? Leave Our Country and go Live Outside the USA until he is out of office and theres some one else in the white House. And of Course you will continue to Whine and Complain… We Wont MISS you.

WAH WAH WAH. You all Cry worst than New born infants.

Uncle Jed

September 28th, 2011
11:15 am

Based on his record and recent past performance, why would anyone suggest that Obama is a good choice for a second term. The tactic of demanding that Kyle explain a Republican plan or that the Republican house has no plan or that congress has no plan or that Kyle left out some point one felt should be included or that Obama has the only plan on the table or asking Kyle to enlighten us about the best way to do things misses the overarching point facing the nation.

Obama was not qualified to be president and his lack of experience and said qualification deficiency led him to appoint too many knuckleheads and hacks to positions requiring learned experience, not just academic accomplishments and high-fives. America will reject Obama in 2012 and will break the Harry Reid gridlock in the United States Senate and then, and only then will this country see a turnaround in employment and economic growth.

Remember Carville: It’s The Economy, Stupid.

Bart Abel

September 28th, 2011
11:17 am

With respect, both Bloomberg and Kyle should know that it is mathematically impossible and downright contradictory to pump half a trillion dollars into the economy, partially by hiring tens or hundreds of thousands of construction workers, and then assert that doing so would save or creates ZERO jobs. Again, IMPOSSIBLE!

I can’t emphasize enough that this survey cannot and should not be relied upon.

Now with Ten Percent More Flavor

September 28th, 2011
11:19 am

Those Bush tax cuts sure created a lot of jobs. Oops. Oh. They “created” jobs but different ones then got destroyed thus leaving us with fewer jobs than before the Bush tax cuts. Is that how it works. Too bad those Bush tax cuts did not pay for themselves. Does Kyle really know what he’s saying. What if we undo the Bush tax cuts and then redo the Bush tax cuts in order to recreate those jobs. We could do that over and over and over until it works.

Darwin

September 28th, 2011
11:19 am

Your right wing solution – let’s just end ALL taxation and ALL regulations. We will just spend money on the defense industry (we can live with those deficits) and live without any safeguards on health, safety or retirement health insurance. That should put us at 0% unemployment and solve all our problems. Right?