National Weather Service/Dr. John Kelley

President Barak Obama promised today that over 600,000 jobs would be created through his stimulus package. While a significant number, there are several things businesses--and consumers--should consider before becoming overly optimistic:

1. These jobs will come primarily in the construction sector. Much of the money is dedicated to maintenance and infrastructure projects. While this money will trickle down to other sectors of the economy, construction will be the primary beneficiary. Some of the funding is going into education.
2. These jobs should be considered temporary. Construction projects are of limited duration. Even if some of the states where these project will take place decide to supplement the spending with spending of their own, few projects will last more than a few years. Any employment gains during that time may be lost against if the economy is not sufficiently strong to provide new opportunities as workers are released from government projects.
3. The predicted number of jobs created is a guess. Many of the stimulus projects are approved and ready to go, but many more are still working through the vetting and selection process. Even where projects are already approved it is impossible to do more than estimate the number of jobs that will be created. It is quite likely the government used the estimates that provide the best outlook.
4. The number of jobs provided is proportionally small. According to the Bureau of Labor Statistics the economy has shed over 7 million jobs since the recession began. The stimulus will only replace less than ten percent of those. More jobs were lost in January 2009 than the stimulus will provide. More jobs are likely to be lost over the next two months than this will replace.
5. The efficiency of the Stimulus is questionable. The government is spending $783 billion dollars in stimulus, and yet only 600,000 jobs are being created. That represents a cost of $1.3 million per job. By contrast if the stimulus funds were divided equally among all workers in America, each would receive over $4800. If divided among every American currently listed as unemployed, each would receive $54,000.
6. The cost of the Stimulus itself is a threat to long term recovery. The US Government has gone deeply into debt to finance the Stimulus Bill. They are currently having difficulty financing that debt, and are having to offer higher returns than previously hoped. The implications for the US long-term economy are cause for concern.

In short, any gains brought about by the Stimulus Bill are artificial and temporary. While a small sector of the economy will benefit for a short time it is unrealistic to expect the benefit to last for very long or to spread across the economy with any significance or predictability.  Any economic recovery is going to have to come from the public sector rather than government.

One key element of economic recovery is consumer confidence. In short, if consumers don't believe things will get better they won't spend their money any more than necessary. Americans have seen too little benefit from the Stimulus Bill thus far, while hearing daily about the consequences of that bill. Any rise in consumer confidence is coming from hopeful signs in the business sector, not from the hope of any government action.

The time is right for American ingenuity, entrepreneurship, and determination. Business needs to step up and drive a return to ethics without government intervention. We need to tap into consumer needs and find new, innovative ways to fill those needs rather than counting on discretionary spending on luxury items to drive the economy. We, as consumers, need to show a little faith and open our wallets just a little to reward those businesses who offer value and service with integrity.

While we may applaud government efforts to try to turn the economy around, it is becoming increasingly obvious that they lack the ability to do so. In the end, the only force large enough to impact the American economy is America itself. America, it's time to get to work.