Stimulus Fact Check

Wednesday, February 17, 2010

Today marks the one-year anniversary of the stimulus plan. David Leonhardt, "Economic Scene" columnist for the New York Times, does some stimulus fact checking.


David Leonhardt

Comments [14]


David Leonhardt definitely paid attention during his econ courses at Yale - he has a firm understanding of the standard Keynesian / mainstream perspective on recessions and their cure. He does a fine job applying a theory riddled with error to everyday economic issues and crises.

Not surprisingly, the Keynesian / mainstream school totally missed the downturn and were befuddled by it. But they have the solution, and it is the same one they always come up with:

Interest rates: Keep 'em real low.

Public spending: More of it.

Private spending: Encourage it.

Private saving: Discourage it.

Money supply: Increase it dramatically.

Value of USD: Devalue it to drive exports.

Inflation: Worry about it when it happens.

Jobs to save: Federal, state, municipal.

How to stimulate private sector growth: Siphon resources from private sector; redistribute as government sees fit.

Trade account deficits: Increase them.

Budget account deficits: Increase them.

Result: ~2,000,000,000 jobs saved or created.

What could go wrong?

Feb. 18 2010 12:03 AM
Asia Society from NYC

Do values matter in a global marketplace? Watch Stephen Green talk about it tonight!

Feb. 17 2010 12:39 PM
Peter from Berkeley Hts NJ

Ryan... reexamine your math....

construction jobs also require construction materials, no?? I have yet to see a construction site that builds on donations! This is NOT public radio!

Also... that includes TARP funds... largely returned!

Also... How many unemployment benefits were NOT extended to GM employees (and their suppliers)?

Also... how many state block grants (a favorite republican tool) are included... that benefit unemployment funds and COBRA benefits and such subsidies?

Yes, it was expensive... and so was NOT supervising the banking/securities industries. That job belonged to agencies which preferred a hands-off style of governing... just what NOW is THAT cost?

Feb. 17 2010 10:43 AM
kai from NJ-NYC

People who criticize the reporting of economic estimates clearly don't understand that virtually all large amounts of gross data are based on estimates. This is true across the data collection spectrum.

For instance, the water withdrawal data from the US Geological Survey, which comes out every 5 years, are based on estimates reported by industry, thermoelectric power plant users, agricultural users, etc. People need to be educated about quantitative (even qualitative) methodology, statistics and data collection before they mount criticism.

By the way, while not perfect by any stretch, the stimulus has (and continues to be) a success. The U.S. and global economy would be much worse without its passage, and history will prove it so.

Feb. 17 2010 10:36 AM
Peter from Berkeley Hts NJ

to Jeff and Todd

Maybe by taking careful notice, you would see what I see -

Most jobs 'saved' are Police /Fire/ Teachers.
If you're not already there, you won't benefit directly, but your property & state taxes may be a bit more stable, and your schools less crowded.

Most of the jobs created are in the pipeline... or 'construction' jobs. Those are almost always temporary anyway... after all, who builds a bridge AFTER the traffic starts rolling?

Union? that's a local issue... usually state by state.

Sorry it's not much for the retail sector, manufacturers, or lifestyle enhancing occupations - Artists are still on the short end.

Feb. 17 2010 10:34 AM
N Reed

Perhaps it would be meaningful to the average person to know what the unemployment rate would have been without the jobs created/retained due to the stimulus spending. Has this number been put out?

Feb. 17 2010 10:32 AM
Laura from Manhattan

Thank you for the listener call-ins about the stimulus because I had no idea it was working so well for such a wide range of people, jobs, and weatherproofing.

What are the chances of inviting the nay-sayers on to defend their lies?

Feb. 17 2010 10:31 AM
Ryan Petersen from Brookly

Seems like you managed to pull that show off without doing some very simple math. You completely overlooked the price per job: $800 billion for 2 million jobs is $400,000 per job saved.

For the most part, these are people who the free market would have laid off, because they were not profitable for their employers to keep them on. That means we are spending $400,000 (give or take) to keep $2 million people on the books who are not generating an economic return.

To your guests point about the multiplier of the stimulus bill, and how its effects are further reaching than can be measured, I found his understanding of economics fairly amateur. The stimulus came from tax dollars and borrowing against future tax dollars, all of which were taken from people who would also have spent them. Only in that case, their spending would have been for things they wanted as individuals, rather than what 8 guys in a room in Washington decide.

Feb. 17 2010 10:27 AM
Jeff Pappas from Ct.

As an Artist and Photojournalist I have always struggled to make a living, Now I am desperate for work and wonder why nothing like the Depression era WPA can not be put into the stimulus package, there was great work created back then, we need to do that again .

Feb. 17 2010 10:24 AM
Todd kent from Brewster, NY

Were most of the jobs saved/created government and/or unionized jobs?

Feb. 17 2010 10:20 AM
Peter from Berkeley Hts NJ

Yes- it made a difference.

I intend to send cards to local merchants who are still my suppliers because of the (some say puny) tax cut that made a difference to my family.

OK, so $120 or so per month didn't change MY lifestyle, but it's more cutbacks that _I_ could avoid!

Feb. 17 2010 10:18 AM
hjs from 11211

any comment on republicats who say the stimulus plan has failed but who take credit for the spending in their home district?

Feb. 17 2010 10:15 AM
Bob from Manhattan

Whoa, Brian! Estimates rather than solid statistics? State and local spending driving an economic recovery? (Doubt it.) Anecdotes rather than hard numbers? And is David is getting his facts from

Sorry, but the entire premise of this segment is perched on very, very unreliable sources. See article below.
GAO warns stimulus jobs data could contain inaccuracies

By Ed O'Keefe
Washington Post Staff Writer
Friday, November 20, 2009

Government auditors raised doubts Thursday about the number of jobs created or saved by the economic stimulus program, but they also said that mistakes reported in recent weeks signal the benefits of government transparency.

Roughly 10 percent of the recipients of stimulus dollars failed to submit quarterly reports last month, according to a Government Accountability Office report released Thursday.

"I think missing reports may drive the job numbers up, and I think there are enough inaccuracies in here to drive the numbers down," said Earl E. Devaney, who oversees, the government's stimulus-tracking Web site. The Obama administration reported last month that the stimulus has created or saved about 640,000 jobs thus far.

Some recipients' failure to report spending data last month "is distressing and must be addressed," Devaney said, adding that Congress should penalize recipients who fail to report.

The doubts expressed by Devaney and acting GAO Comptroller General Gene L. Dodaro at Thursday's House oversight committee hearing lend nonpartisan credence to general concerns about stimulus data. Devaney, who assumed his position in the spring, has repeatedly cautioned government officials at all levels that early data would probably contain errors. But some of those mistakes aren't necessarily a bad thing, he said.

Feb. 17 2010 10:12 AM
hjs from 11211

is the new big subsidy for building nuclear power plants part of the stimulus plan?

Feb. 17 2010 10:09 AM

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