Obama Campaign objects to Obama Administration Stimulus Statistics
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Mark Hayward reports in the Union Leader on our story on New Hampshire stimulus statistics, and the negative reaction it received from the New Hampshire Obama campaign.
Bosse’s calculation links three years of stimulus awards — $985.7 million — to the 845 jobs, a calculation that works out to $1.1 million per job.
During its peak, however, stimulus spending funded more than 1,300 jobs for five straight quarters, including 2,337 in the third quarter of 2010, recovery.gov reported.
And much of the stimulus program did not go to direct job creation.
Harrell Kirstein, a spokesman for the Obama campaign, said a third of the Recovery Act went to tax cuts largely aimed at the middle class and small businesses.
“President Obama brought us back from the brink of economic disaster, and we have now seen 25 months of consecutive private-sector job growth,” Kirstein said.
Tracking stimulus statistics is tricky business, because the numbers collected by Recovery.org aren’t particularly relevant to how people talk about the stimulus package.
While it was being debated, the Obama Administration predicted that the American Recovery and Reinvestment Act (ARRA) would create or save 16,000 jobs in New Hampshire alone. This was based not only on the number of jobs that it would fund directly, but also on the multiplier effects that they assumed each dollar of increased government spending would have throughout the economy.
These assumptions were deeply flawed, since they did not take into account the brake on economic activity that accompanies government spending, namely the taxes and debt that finance it. But more importantly, trying to track the direct and indirect jobs created or saved by a particular government grant is impossible. How many new people did Dunkin Donuts need to hire to brew the coffee for the crews repaving Route 101? Would a town really have fired employees if it didn’t get a stimulus check? These are counter-factual, and can neither be proved nor disproved.
Recovery.org was also plagued by massive data entry errors from grant recipients, resulting in a massive database of useless information and phantom Congressional Districts. After a massive overhaul of the site, and some basic quality controls on its data, Recovery.org has become a fairly useless tool to track ARRA funds. But the ways the Obama Administration tracks jobs is quite confusing.
After admitting early on that there was no real way to track jobs “created or saved” by the stimulus, the Administration switched to jobs “funded” by the bill, setting out a very specific formula for recipients to use.
The new metric of “Jobs Funded” tracks how many hours of work are being paid for with stimulus funds, whether the job was created by the stimulus or not. All of those hours are added up, and divided by the number of work weeks since the law’s passage.
If the stimulus funded a construction job for every week of the past three years, it would show up a one full-time equivalent (FTE) job. If that stimulus project was active for just one year, it would account for about 1/3 FTE. Since most stimulus grants have long been exhausted, the number of hours funded is staying pretty much where it is, while the number of potential work weeks increases. The numerator stays the same, while the denominator increases. That means the total number of FTEs funded under the stimulus drops over time. That’s not me. That’s just math.
Unfortunately, both supporters and opponents of the stimulus look at the quarterly job reports as a snapshot of how many jobs are currently being funded by the stimulus. It’s not. There are far fewer than 835 full-time jobs being paid for by ARRA right now. But that’s the average number of jobs funded over the life of the program.
While the stimulus at its high point was writing the checks for about 3,000 people in New Hampshire, it has funded enough hours to keep just 845 people employed over the past three years.
This is not a particularly useful way to track the stimulus, but it’s the data that the Obama Administration has decided to give us.
Note that the $985,000 million New Hampshire received under the stimulus was for direct grants, not the tax provisions that Mr. Kirstein references. Much of that grant funded supplanted state and local spending that was already budgeted. For instance, of the 3,000 jobs funded at one point, 2,000 were for public school teachers. The New Hampshire Legislature used federal stimulus checks to make its adequacy payments to local school districts. Under state law, any surplus in the Education Trust Fund reverts to the General Fund, allowing lawmakers to use the windfall to balance the state’s budget deficit. We can argue the merits of that decision, but it certainly didn’t have anything to do with creating jobs in New Hampshire, and stimulus supporters should acknowledge as such when defending ARRA.
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