Remember when George W. Bush trotted out the term “Fuzzy Math” during one of his presidential debates? A grasp of math appears to still be elusive to conservatives. My email box has been beset with notes from my conservative friends over this story in the Weekly Standard that suggests the Economic Stimulus package passed by the President cost in excess of $278,000 per job created.
“What a waste!” they write. “We should have cut a big check to everyone,” they opine.
Uh, the analysis The Weekly Standard used is a bit off. The Stimulus is more than about jobs created or saved. But let’s have some fun with math, shall we?
By using the same standard for math that the Weekly Standard used for their story, let’s apply it to the Bush Tax Cuts. The net net here: The Bush Tax cuts cost taxpayers about $329K for each job created during the Bush presidency.
From the Weekly Standard story: “When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides 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.
The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.
In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.”
Well, the Standard’s applicaiton of math when applied to the Bush Tax Cuts shows that each job created using the dollar value of these cuts cost taxpayers $329,220 for each job it created. Fuzzy. Math. ?
When the same exact formula used by the magazine is applied to the Bush tax cuts passed in 2001 (which the Joint Committee on Taxation says cost about $864.2 billion from 2001-2008 during the Bush presidency, the Wall Street Journal said a little more than $2.65 million jobs were created. Using simple math, that comes to $329,220 per job under the Bush tax cuts if we believe for a second that every job created during the Bush presidency was the result of his tax cuts. If they weren’t (and they weren’t), the cost per job is even higher. But those tax cuts didn’t go to working Americans; most of them went to the wealthiest 1 percent.
The New York Times offers a terrific list of specifically what the Stimulus program paid for. Click here to see the detail. Please note the funds provided for more tax cuts, help for job retraining and education, and assistance to states for critical services.
Here’s a terrific comment about the Weekly Standard story from the White House:
White House spokesperson Liz Oxhorn said:
“The Weekly Standard] study 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. Thanks to the Recovery Act, 110 million working families received a tax cut through the Making Work Pay tax credit, over 110,000 small businesses received critical access to capital through $27 billion in small business loans and more than 75,000 projects were started nationwide to improve our infrastructure, jump-start emerging industries and spur local economic development.”