CBO Report Estimates Obama’s Stimulus Could Have Cost Over $4 Million Per Job

A new report by the Congressional Budget Office reveals that President Obama’s stimulus may have cost as much as $4.1 million per job. That’s right, PER JOB! But we’re supposed to believe that spending slowed under Obama’s leadership. Yeah, right, tell me another one.

When [the American Recovery and Reinvestment Act] was being considered, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation estimated that it would increase budget deficits by $787 billion between fiscal years 2009 and 2019. CBO now estimates that the total impact over the 2009–2019 period will amount to about $831 billion.

By CBO’s estimate, close to half of that impact occurred in fiscal year 2010, and more than 90 percent of ARRA’s budgetary impact was realized by the end of March 2012. CBO has estimated the law’s impact on employment and economic output using evidence about the effects of previous similar policies and drawing on various mathematical models that represent the workings of the economy. …

On that basis CBO estimates that ARRA’s policies had the following effects in the first quarter of calendar year 2012 compared with what would have occurred otherwise:

– They raised real (inflation-adjusted) gross domestic product (GDP) by between 0.1 percent and 1.0 percent,

– They lowered the unemployment rate by between 0.1 percentage points and 0.8 percentage points,

– They increased the number of people employed by between 0.2 million and 1.5 million,

– They increased the number of full-time-equivalent jobs by 0.3 million to 1.9 million. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.)

James Pethokoukis crunched the numbers for us:

OK, so without the stimulus, there would be anywhere from 200,000 to 1.5 million fewer people employed right now? That means the current cost-per-job created is somewhere between $4.1 million and $540,000.

Even half a million per job is too much. Plus, who is to say how many jobs weren’t created because of the stimulus spending? How many employers looked at the massive spending by the federal government, saw the tax hikes coming down the pike, and decided to put off hiring?

Speaking of wasteful spending on jobs, be sure to read about how the government is spending $1.4 million on summer jobs where kids will watch birds and count fish. Heck, at least this time they say they’ll employ about 500 kids. Maybe they should have just done that with the stimulus and we could have saved a few billion bucks or so.