A war of words was heating up today over claims that President Barack Obama’s stimulus package has cost taxpayers $278,000 for every job it created.
The conservative Weekly Standard
extrapolated the figure from a report issued over the weekend by the president’s own Council of Economic Advisors.
The program “did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt,” Jeffrey H. Anderson wrote in the Standard article, which has received far more attention than the original report.
House Speaker John Boehner tweeted the Standard story today, saying it shows the “economy would be generating job growth faster if Dems hadn’t passed the ‘stimulus.’”
But the White House claims the Standard has its math all wrong, saying it didn’t take into account construction materials, new factories, and other permanent infrastructure that the stimulus paid for.
The Standard article claimed that the stimulus could have had a negative effect on the economy. “It’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s ‘stimulus’ has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt,” Anderson wrote.
He even claimed that the government could have signed a $100,000 check to everyone the stimulus has helped and still saved $427 billion on what the stimulus cost.
And he said the very fact that the report was issued late on a Friday before a holiday weekend — and therefore received little media attention — was “further evidence that President Obama’s economic ‘stimulus’ did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.”
But the White House disputed the Standard’s conclusions. Spokeswoman Liz Oshorn said the article is “based on partial information and false analysis.”
“The Recovery Act was more than a measure to create and save jobs; it was also an investment in American infrastructure, education and industries that are critical to America’s long-term success and an investment in the economic future of America’s working families,” Oshorn saidd.
The nonpartisan Congressional Budget Office had confirmed that the Recovery Act “delivered as promised, lowering the unemployment rate by as much as 2 percent, boosting GDP by as much as 4 percent and creating and saving as many as 3.6 million jobs," she said.
The Council of Economic Advisors is made up of three members nominated by the president and confirmed by the Senate. It consists of Chairman Austan Goolsbee, Katharine Abraham, and Carl Shapiro.
Their report, the seventh since the stimulus began, insisted the program has played “a significant role in the turnaround of the economy” over the past two years.
“Real GDP reached its low point in the second quarter of 2009 and has been growing solidly since then, in large part because of the tax cuts and spending increases included in the Act,” the report read.
But it admitted that it is impossible to know the real impact of the stimulus as “no one can observe directly what would have occurred without the policy.”
The effects of the stimulus have long been argued. Writing in the Richmond Times-Dispatch, A. Barton Hinkle reported that nobody could seriously argue that it had had no effect on the economy.
However, he likened it to a purse snatcher who took a handbag containing $500 and spent the money on a new television.
“It is categorically undeniable that the theft has created a sale for the TV store. Conservatives who pretend the stimulus has not created any jobs whatsoever stand in the position of an observer trying to deny the TV has been sold,” Hinkle wrote.
“Yet the liberal analysis lacks any recognition that the purse owner now has $500 less to spend on the laptop computer she was going to buy. The theft has generated one sale only by destroying another.
“The first effect is easily seen. The second is not,” Hinkle added. “But only the economically illiterate would conclude that just the first effect occurred, and that therefore the way to increase consumption is to encourage more purse-stealing.”
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