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
Kyle Wingfield
September 28th, 2011
11:20 am
I made a mistake while revising this blog post. The 3:1 ratio refers to the number of economists surveyed by Bloomberg who predict job creation of less than 250,000 next year (13) compared to those who predict 1 million or more (4).
The number who predict zero job creation is 5 — more than the number who predict 1 million or more, but certainly not a 3:1 ratio.
I originally wrote about the comparison of <250,000 to >1 million, and that’s when I wrote the 3:1 ratio. Before posting, I decided to change the comparison from <250,000 to zero. But I apparently failed to update the ratio.
I don’t think this changes the broader point — that Obama’s jobs plan is seriously underwhelming — but I sincerely apologize for this mistake and am correcting the text above.
Kyle Wingfield
September 28th, 2011
11:21 am
As I already noted, the list of economists is available at the bottom of the above-linked Bloomberg story, to which I am linking again here.
JF McNamara
September 28th, 2011
11:21 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.”
Well what is the Republican plan then? He cut the payroll tax which is what Republicans wanted. He cut tax on Small Business which Republicans have talked about ad nauseum. The only other catch phrases he didn’t address are more free trade (outsourcing for big business) and less burdensome regulation (more pollution).
Tax cuts is the main propaganda point being touted by Republicans, and Obama relinquished them. Now, Republicans are not only distancing themselves from it, Republicans are saying its too costly?
Tell me that its not enough, but don’t tell me it doesn’t work. Its a direct reflection on Republicans if it doesn’t work, because the party line is that tax cuts spur the economy ALL the time and raising taxes harms the economy ALL the time.
Now with Ten Percent More Flavor
September 28th, 2011
11:23 am
You critics best bite your fingers or else Kyle will whip out proof that the Bush tax cuts created all those jobs that we don’t have.
Kyle Wingfield
September 28th, 2011
11:25 am
Maintaining: The rules of this blog prohibit cutting and pasting entire articles from other sources; it’s a copyright issue. Please re-post an excerpt from the article and a link so that everyone can read it in its entirety. Thanks.
Paddy O
September 28th, 2011
11:32 am
for those obsessed with the government doing something – they can’t force an employer to hire. however, the focus on job eliminating technology is rather cutting the nose of inspite of face. The government can only create an environment of business friendliness. Our current over-regulated economy is one of the aspects spurring those who move to China to move.
Paddy O
September 28th, 2011
11:33 am
a, the typical liberal response: throw $$ at the problem – plus, the old tax/borrow & spend exercise. gotta love those deficit spending democrats. however, I don’t see the Democrats in the Senate doing much with Obama’s ideas – perhaps he has thrown too many fellow colleagues under the bus to elicit much support?
Kyle Wingfield
September 28th, 2011
11:37 am
JF: Look, all I can say is that I’ve been saying this since before I got this job.
Hiring, or at least the kind of hiring that we ought to be promoting, is a long-term decision. You don’t prompt long-term decisions with short-term incentives.
Halftrack
September 28th, 2011
11:41 am
Forest Gump said it best about our Politicians and Obummer, & et. al. ” Stupid is as stupid does.” Now go figure for yourself.
Streetracer
September 28th, 2011
11:41 am
This bill is absolutely guarenteed to create at least one job. There will have to be a government employee to sign all those checks.
BTW: Since infrastructure is one of the two primary functions of local government (according to my high school civics class), why do we need special taxes, and “Jobs” bills to repair infrastructure?
a dad
September 28th, 2011
11:42 am
Let us also not forget that Obama’s Job plan calls for it to be paid for with “future” cuts and tax increases, none of which are assured or set in stone. Will someone please tell me what our gov’t produces? Answer? Zip. Our gov’t simply pulls in revenue, then re-distributes in the form of entitlements, gov’t programs, etc., but it “produces” squat! Keynesians, am dying to read your responses.
As for taxes, if everyone truly wants everyone, even those “evil rich” to pay their fair share, why not simply impose a flat tax on everyone? Then everyone pays the same proportion of their income. Equally. What can be more fair than that?
Our corporate tax rate (35%) is one of the highest in industrialised nations, and I believe the Prez calls for that to increase. Face it folks, business are in the business to make money. If they have a choice between keeping their income high, or hiring new workers, guess which one wins?
Now, since I’m not running for anything, I don’t have to provide solutions, but if I were running, I would impose either a flat tax or a national sales tax to provide the govt’s revenue. Our tax code is a joke, so simplify. Wouldn’t it be much easier to predict income if you knew that 10% (arbitrary figure) of your income, your dividends, etc., were going to be paid as taxes? Or that when you spend a dollar, you’d atually pay $1.10? People with more money usually buy more, and a Maserati costs a heck of a lot more than a Corolla, so in effec those evil rich would be paying more in taxes than Joe Average.
Then again, we can just blame Bush for all of this, right?
Let the games, and discourse, begin!
Road Scholar
September 28th, 2011
11:44 am
Yeah Kyle, don’t cut and paste the whole article so that we can see the context the quotes are used in?
You also stated that President Obama didn’t talk about an infrastructure bill but only one that will create jobs. BS! He stood at a bridge and stated its usefulness as to capacity of cars and load capacity was below what is needed. He has alluded to many times the ASCE (American Society fo Civil Engineers) report that graded our infrastructure condition at a D- at best. Do you even read anything that doesn’t agree with you positions? Obviously you do not understand or remember it!
Ok since Kyle has no economic plan beyond what has failed the conservatives, how about the other conservatives. Do you have one with details and…er…facts?
Just remember that for every recesion up to Bush2, infrastructure spending has created jobs and brought us out of the recessions. How is this different? Now remeber you must use accurate history! Yikes!
Streetracer
September 28th, 2011
11:54 am
Road Scholar: You have, I think proven my point. If infrastructre is a PRIMARY function of local and state government, why do we need special taxes and Federal “Jobs” bills to take care of infrastructure? I hope you an understand my point. Governments have abdicated one of their PRIMARY responsibilities to pay for other stuff and then want special consideration to pay for that PRIMARY function.
Maybe We Should
September 28th, 2011
12:02 pm
blkshepherd,
Just to keep you informed, your post was nothing but the same “WAH WAH WAH”ing done by the individuals you so lovingly called out.
In regards to your suggestion, If “we” were to leave the country, you would be left in a country consisting of 99% of the population on welfare, medicare, or medicaid. But seeing that you are in such favor of staunch Liberal plans, you would be more than willing to have your taxes increased to foot the bill no? The average working U.S. citizen age 22-25 pays upwards of 30-36% of taxes on their income. Then comes the sales tax into play, add another 6-9%; you’re looking at 36-45% of everything I earn being taken by the government. I’m being told I need to buy buy buy yet all i hear from the Left is I want to tax you more. Investment by individuals in the long-term is what made this country and now your trying to stymie it. Get rid of the IRS, consolidate the ever growing amount of departments in the government. The flat tax will do wonders, no one will be complaining on how things are “unfair” except the drug dealer on the corner who no longer gets his unemployment check or the family of 10 who don’t know how to control themselves or birth control and rely on others.
On another note, I believe it’s the state of New Hampshire that pays those that represent their state in the Senate and House an average wage (something like 60-80k). Why can’t this be done everywhere? The original intent was for those in Congress to represent us. We have turned it into a political forum for them to find ways to grow their own personal businesses. You cut their pay significantly and put them under the state or federal employee retirement plan; and only those who have it in their hearts to listen to and serve their constituents will run and win. It’s all about money, don’t let anyone fool you. Take that away and you will find a less corrupt, more for the people United States of America.
JoeFann
September 28th, 2011
12:05 pm
If Kyle won’t give you a fix, I will. Here’s the short version, focused on the biggest budget items. Doesn’t work overnight, but fixes a lot of long-term problems.
Defense: Close all but 10 (or less) foreign bases, spread strategically throughout the world (Ramstein, Diego Garcia, Phillipines, etc.) Close rest and re-deploy. Freeze all new weapons systems purchases, but continue to “reasonably” fund R&D for future review. Get out of Iraq, Afganistan, and the UN, after presenting each with a bill.
Social Security: Keep Congress’ hands out of the kitty. Require repayment of the trust fund “borrowings” over 10 years. It’s self-sustaining.
Medicare: No change for the 55 and up crowd. New rules for under 55s going forward, to include coverage for annual wellness visits for life, with limited diagnostics. Diminishing future coverage by age in 5 year increments, until no coverage at age 90. Rework Medicare Part D to allow negotiations with all pharms, or repeal. Medicare PR tax continues as is for 30 years, but allow for private additional contributions (like a Health savings account,) that are inheritable and controlled only by regulation, not goverenment investment. Within 30 years, dismantle and replace.
Medicaid: Send $ to states and feds stay out of it, except to transfer funds. No mandates. Dismantle and replace within 30 years.
Other spending: End all corporate and farm subsidies that are not R&D-related. End all foreign aid to non-NATO countries. Emergency relief and humanitarian aid are acceptable.
Taxes: For five years, increase all tax brackets by 5%, including capital gains, with no allowable extension. Within the five years, revamp to three income tax brackets with no itemized deductions except for interest on up to $100,000 of savings, and charitable contributions, which should be encouraged. Corporate taxes in a similar three-tier system, based on revenue, not income. (Income should be taxed, but bracket should be based on revenues to allow for encouragement of small businesses.) Eliminate most corporate deductions and tax credits. Allow government monopoly of legalized drugs, including tobacco and alcohol. Sold and verified only through gov’t stores, taxed at 50%, 10% used for education and rehab, if needed. Employers still allowed to set rules for employees and drug test. Mandatory drug testing for all government program recipients.
It’s a start. Go Dawgs!
Road Scholar
September 28th, 2011
12:08 pm
Streetracer: Because our congress has not passed the next transportation or infrastructure bill in the past two years!!!! Safety-lu was passed in 2002 I believe and had a life of 6 years..pretty standard for transportation legislation. But since 2008 the Congress has been unable or unwilling to pass a new bill; the conserves want to link it to the present revenue stream from the federal gas tax, which is dwindling due to inflation and costs. The fed gas tax is not a % tax but a cost per gallon. Less people are driving less in more efficient vehicles!
The feds also have a roll in Interstates, US routes, and other federal transportation programs. While the Interstates also have state route designations, federal monies regularly pay for 90 % of construction and maintenance on them. They make up the National Defense Highway System…like the autobahn in Germanty since WW2. Where do you think that Eisenhower got the idea for the Interstates? Unlike the Chinese who are building an “Interstate ” system all at one time, we built ours over many decades and still add to it in new routes and expanding existing capacity.
Now how do you pay for the needed capacity, load limited bridges ( the politicians keep increasing the allowable weights for trucks), and wear and tear on our roads? Oh and the infrastructure is aging beyond its design life of 50 years.Try Spring Street (two sections of viaduct) downtown with a sufficiency rating of 4 out of 100 points!!! Check out the sufficiency ratings on Georgia’s bridges that GDOT inspect each year!!!
Road Scholar
September 28th, 2011
12:11 pm
JoeFann: I was with ya’ until the Go Dawgs!
redneckbluedog
September 28th, 2011
12:12 pm
One decent month of job growth is more than Cantor, Boehner, McConnell, Gingrey, and Chambliss have created thus far….It costs what it costs…..We can get the money by taxing the above…..Because their saviors, the Kochs, are laying off…….
Jefferson
September 28th, 2011
12:13 pm
Lack of income growth over the last ten years has caused the unemployment problem. No president caused it nor did congress. Between 2000-2010 jobs haven’t kept up with the population growth, if money is idle and not spread unemployment will be high and rise.
JoeFann
September 28th, 2011
12:14 pm
Road–It takes all types, and my tent is accomodating. I’m in the roads, too, and GDOTs lack of funds is about to cost about 30 more jobs in Ga. for us.
Ivan
September 28th, 2011
12:15 pm
Road Scholar
September 28th, 2011
11:44 am
Yeah Kyle, don’t cut and paste the whole article so that we can see the context the quotes are used in?
____
Clicking links is hard. Maybe Obama can offer a plan that will make it easier to click?
Road Scholar
September 28th, 2011
12:17 pm
JoeFann: What type of work do you do?
JDW
September 28th, 2011
12:21 pm
@ Kyle who wrote…”“Stanley estimated the program would increase payrolls by 50,000 and add 0.25 percent to GDP next year.”
Yes he did estimate that also using the current situation as the baseline. Using Stanleys estimate the net impact would be the cost of doing nothing plus the .25% or 1.95% net impact to the GDP…
Maintaining Sanity in Today's World
September 28th, 2011
12:23 pm
Kyle
Thank you for pointing the rules out to me.
That said I hope your tolerance for name calling as far as our President and elected representatives isn’t too high. Respect for the office and decorum are called for.
Now about that better way. Which way would that be?
Now with Ten Percent More Flavor
September 28th, 2011
12:24 pm
Get rid of those nasty regulations that make slave labor illegal here in the states so Republican job creators can bring those jobs back, once they get a sufficient number of job creating tax cuts, naturally. Praise be to the all mighty deregulated job creating tax cuts. Hey Kyle, what about that payroll tax cut from the corporate ledger. Surely you must concur that it is one of those all mighty job creating tax cuts so you must support the elimination of the corporate portion of the payroll tax cut. Just think of the added benefit of hastening the demise of social security and medicare. You’re probably feeling some trickle down just thinking about it.
JDW
September 28th, 2011
12:24 pm
O’ and Kyle…does your stand mean that you have revised your notion that tax cuts drive job creation? After all some $235 Billion of this proposal is tax cuts…
JoeFann
September 28th, 2011
12:25 pm
Road–DOT GC
Liberal Larry
September 28th, 2011
12:32 pm
What we needs is another big govt program to fix everything. Works all the time right?
Streetracer
September 28th, 2011
12:33 pm
Road Scholar @ 12:08 – Yes interurban infrastructure is a federal issue (that is national hiways and the Interstate system). But a fair amount of the spending we are talking about here is appearantly intraurban, which is a local issue. To go a little farther; yes 90% of construction of the Interstate system was Federal funds, but what I remember from my days with Nebraska Dept of Roads is that maintainence was strictly on the States dime.
Road Scholar
September 28th, 2011
12:43 pm
JoeFann: I’m retired GDOT Planning and Design. I work part time supplying on call engneering services, when needed, to a MPO. I was BG (Before Gina); couldn’t have retired at a better time!
Between the accounting change, the decrease in federal and state revenue, and the recession, I know all in the industry has had to scurry. Design consultant staffs are down about 30%, maybe more.
Street racer: Most now in Ga is paid with Federal funds. Incidentally, GDOT used to overlay 10% of their state routes each year; now it is down to 2-3 % each year due to money shortages. Near my last year, GDOT let $2.3 B to contract; this year they might make $1B, if they are lucky.
JDW
September 28th, 2011
12:54 pm
O’ and Kyle, I took a look at the chart on the bottom and quite frankly don’t put much credence the median conclusions. As you state there are several organizations that show zero across the board. My guess would be that those organizations choose not to respond. Even if they thought the impact was low an estimate of zero is absurd on the face of it. The plan contains monies specifically for the retention of state and local jobs that will be cut without aid. No matter how you dice it that alone equals more that zero. Then you have the issue of SocGen who according to the chart estimate the impact to GDP to be 1.7% in 2012 and job creation at 1…pretty sure that GDP growth of 1.7% generates more than one job, even if it was Warren Buffett’s job.
Back the absurd out and the “median job growth number turns into around 500,000 which is likely closer to real life. Still lower than it should be but got to feed those Repugs some useless tax cuts.
Lil' Barry Bailout (Revised Downward)
September 28th, 2011
12:55 pm
Will the Congress be voting on the Idiot Messiah’s “jobs” plan, or have Democrats achieved their wet dream of eliminating voting and investing all power with a liberal fascist chief executive?
yuzeyurbrane
September 28th, 2011
12:56 pm
Kyle, you convinced me. We should returned to W’s master plan that brought us job losses of over 700,000 per month.
Streetracer
September 28th, 2011
1:01 pm
Road Scholar @ 12:43(?) – I realize that. But my point is what are governments doing with the tax money they collect to perform one of their Primary functions?
Lil' Barry Bailout (Revised Downward)
September 28th, 2011
1:03 pm
Maintaining Sanity: Respect for the office and decorum are called for.
———–
Does the person who holds the office “respect” it by labeling half of Americans as the “enemy”?
Road worker
September 28th, 2011
1:06 pm
There will be NO infrastructure jobs created north of the Mason Dixon line in a month or so. Up here they post the roads when it gets cold so there go your jobs till April or May. Brilliant plan. Maybe we can start building an ark. Rain is in the forcast sometime in the future.
UGA 1999
September 28th, 2011
1:10 pm
$447 Billion? I wonder if Obama comprehends how much money that actually is.
Kyle Wingfield
September 28th, 2011
1:26 pm
JDW @ 12:21: I think you missed the point, which is that the 1.7 percent figure is one economist’s opinion. You can’t just tack it onto everyone else’s figures. And @ 12:54: The orgs that chose not to respond are marked with an N/A; if you count the ones that aren’t, they total 28, which is what Bloomberg lists as the number of responses to that particular question about 2012 jobs.
How could some of them say it’s zero? Well, they could believe that the money Obama wants to use must come from somewhere else, and isn’t being used elsewhere. You might disagree with that belief, but it’s not absurd.
JDW
September 28th, 2011
1:36 pm
@Kyle…”How could some of them say it’s zero? Well, they could believe that the money Obama wants to use must come from somewhere else, and isn’t being used elsewhere. You might disagree with that belief, but it’s not absurd.”
I see, these must be the Republican economists…oooops can’t be that the Republicans in theory would have posited that the tax cuts alone create jobs. Maybe they are the Democratic economists…nope can’t be that building bridges and hiring teachers counts for something. Why these must be the Anarchist economist’s…for every government action there is an equal and opposite reaction…why that’s just absurd…ooops that is where we started this discussion now isn’t it?
Road Scholar
September 28th, 2011
1:39 pm
Road Worker; So all the needed projects are designed already? Right of way bought? I think not! Yes I am sketical about “shovel ready” projects esp since most that were ready have been constructed, but where did the money come to replace those projects already on the “shelf”? You can also do design build so that when the thaw comes, the private contractors are geared up to construct.
In the south, there are days during the winter when it is warm enough to lay asphalt and pour concrete. Living in a state with 10.2 % unemployment ( Yes Ga leads in somethings!), any jobs, esp design ones which lead to construction jobs, are needed and wanted.
Streetcar: The gas tax…which can only be spent on roads…is being spent as quickly as possible on good projects. This crap from a contractor about GDOT holding onto money is either directed at the funding balances needed to finish jobs already under contract, or is sour grapes of desperation. From my previous post, going from $2.3B to about $1B in a few years has hurt the contractors who geared up and hired fo the alledgedly better years to come…then the recession
Streetracer
September 28th, 2011
1:40 pm
JDW @ 1:36 – I don’t very often critize others, but, you sir, are dumber than a red brick.
Road worker
September 28th, 2011
1:41 pm
Ah…JDW and the circle jerk of logic. My guys are thinkers, your guys are biased. Half a billion went to Solyndra and nothing happened.
UGA 1999
September 28th, 2011
1:41 pm
You guys keep saying “Obama’s money”….you do realize that it is actually OUR money right?
Maintaining Sanity in Today's World
September 28th, 2011
1:42 pm
Kyle,
I came back to check to see if you had posted your better way.
I’ll check back later.
Kyle Wingfield
September 28th, 2011
1:44 pm
JDW: Bastiat figured this out a long time before you or I came along.
Uncle Jed
September 28th, 2011
1:45 pm
The Republican Plan: Give BHO plenty of rope…
Gallup Daily Obama Tracking Poll
Approve 40%
Disapprove 51%
++++++++++++++++++
A new Rasmussen Reports national telephone survey of Likely U.S. Voters finds that Obama earns 39% support while Cain attracts 34%. A month ago, the president led Cain by seven percentage points. In March Obama held an 18 point advantage over the businessman and talk show host.
++++++++++++++++++++
The cost of health insurance has surged in the US this year, according to a survey of employers, dealing a blow to claims by the Obama administration that healthcare legislation introduced last year would curb costs.
++++++++++++++++++++
In a new Harris Poll, 2012 Republican presidential candidate Ron Paul beats President Obama 51 percent to 49 percent in a general election race.
++++++++++++++++++++
Obama’s Euro-Crisis Lecture Is ‘Pitiful and Sad’
++++++++++++++++++++
Two new Quinnipiac polls provide more evidence the 2012 presidential election may be decided in the Rust Belt.
In Pennsylvania, just 43% approve of President Obama’s job performance, while 51% say he doesn’t deserve a second term.
In Ohio, just 42% approve of his job performance, while 51% say he doesn’t deserve re-election.
++++++++++++++++++++
Generation 44, a supporter of the Democratic National Committee, said President Obama will be at the Renaissance Grand Hotel at 800 Washington Avenue at 5:00 p.m. October 4th.
The group has a limited number of $1,000 tickets available for $250.
+++++++++++++++++++++
And Jimmy Carter smiles broadly, along with the Clintons.
Road worker
September 28th, 2011
1:45 pm
I keep coming back to see what JDW posts. It makes me smile
Aurelius
September 28th, 2011
1:49 pm
We need to build a new factory to make the widgets that are the trademark product of our company. Where to build? Where to build so that in 30 years the factory is still productive and profitable?
Where is the market for widgets? Everywhere? True, but 95% of all consumers in the world live somewhere besides the USA. That number will remain stable. And per capita consumer spending is rising in most of the world and dropping in the US.
Both engineering and logistics warn that the US transportation system is on the verge of crumbling. How will we transport and distribute the widgets? Will or will not the US rebuild its infrastructure? Our lobbyist in DC say “not as of today.” The hot topic in DC is reduced spending and tax reform.
Indonesia has very low labor costs, a growing highly trained labor force and sits on the edge of 33% of all consumers in the world. The US labor force is getting weaker and they are now DC is talking about cuts in education.
We have not built a factory in the US since 1978. And we have record profits.
So, where do we build?
Uncle Jed
September 28th, 2011
1:49 pm
UGA 1999
September 28th, 2011
1:10 pm
$447 Billion? I wonder if Obama comprehends how much money that actually is.
+++++++++++++++++++++++++++++++++
In Britian they would call it Four Hundred and Forty-Seven THOUSAND MILLION…and Washington verbally tosses around trillion as easily as they used to billion and before that million.
Streetracer
September 28th, 2011
1:53 pm
Uncle Jed – I think you are right. In Europe, a billion is 100 million not 1000 as it is here. Maybe that is part of the problem; folks use the European defination in their thinking.