The headline of the story below from Politico says that the Congressional Budget Office estimates that President Obama’s stimulus bill created up to 3.3 million jobs.
The headline itself is misleading. The CBO really said 500,000 to 3.3 million, quite a different picture. Moreover when an estimate range is that broad, it is really saying: we have no idea, take any figure you like. It just something modeled on the computer anyway and will go up or down depending on the assumptions used.
Even so, the analysis is on its face misleading. Why? Because it doesn’t take into account what would have happened if the money had been used differently, whether for tax cuts or for deficit reduction. Given the fear that spiraling budget deficits have created, deficit reduction might well have helped produce more jobs, especially if combined with other sustainable as opposed to unsustainable financial and economic policies.
In short, this is a non-story if ever there was one. Keynesians who want more money printing and borrowing and spending can assert anything they want, but they don’t have a shred of real evidence to back it up.
Hunter Lewis 11-23-2011