On another occasion, after having claimed that Obama’s stimulus “created or saved” some 60,000 jobs, the administration acknowledged that the number was bogus — arising from “unrealistic data.” The General Services Administration reportedly spent $84 million developing the official Recovery.gov website that announced jobs saved or created in non‑existent congressional districts, like Arizona’s 15th (that state has only eight congressional districts) or North Dakota’s 99th (that state has only one congressional district) — 440 non-existent congressional districts altogether. Ed Pound, the communications director of the Recovery Accountability & Transparency Board, said simply, “We report what the recipients submit to us.”
Even if one were to accept the original claims that a million jobs were “saved or created,” the total amount of stimulus money spent was about $160 billion, which would mean each job cost taxpayers $160,000! In fact, when all the undocumented claims are discarded, the cost per government job is likely to be closer to what Cato Institute economist Alan Reynolds has estimated: $646,000. In some cases, the cost went much higher, as when nearly $6 million was spent to save just three jobs at Burson-Marsteller, a public relations firm headed by Hillary Clinton’s former pollster Mark Penn. Cost per job saved: $2 million.
One should keep in mind, of course, that stimulus money doesn’t come out of thin air. It comes from taxpayers. As a result of taxes needed to pay for stimulus, consumers have less money for spending, and employers have less money for hiring. Jobs created by stimulus are cancelled out when jobs are destroyed by taxation.
From the very beginning, Obama’s stimulus extravaganza was doomed to become a comedy of errors. Politicians don’t begin to have the kind of reliable, detailed information needed to run our vastly complex, fast-changing economy. Nor do politicians have incentives to make good business decisions. Moreover, it’s no secret that people aren’t as careful when they’re spending other people’s money as they are when they’re spending their own money. That Obama would again try to promote stimulus makes clear that his big-government ideology, progressivism, is intellectually broke.
Jim Powell, a senior fellow at the Cato Institute, is the author of FDR’s Folly, Bully Boy, The Triumph of Liberty and other books.