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The federal stimulus saved and created 1 million jobs, really? Part 2

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 Obama for America / AP

Originally, President Obama promised the $787 billion Stimulus Act would save or create 3.5 million jobs.  As of today, recovery.gov has posted that 640,329 jobs were saved or created. However, yesterday, President Obama referenced a much larger number:

Over the past 10 months, we’ve taken a number of bold steps to break the back of this recession. We’ve worked to stabilize the financial system, revive lending to small businesses and families, and prevent responsible homeowners from losing their homes. And through the Recovery Act, we’ve cut taxes for middle class families, extended and increased unemployment insurance, and created and saved more than a million jobs.

Part 1 of this article detailed a few concerns that raises are being counted as saved or created jobs. Part 1 also showed a few examples of reports by organizations, in both the public and private sectors, routinely contain over counts and other blatant errors. Many questions remain about the overall effectiveness of the stimulus and the accuracy of President Obama’s statements regarding jobs saved or created.

In Boston, a review of stimulus spending via interviews and government reports showed that organizations benefiting from the program “miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.” When the companies or organizations seek to correct errors, the results are not often reflected in the federal government figures.

The specific public education related stimulus spending that was supposed to have been used to maintain services to students was instead used to give raises in some cases. The Boston Globe reports:

Some of the errors are striking: The community action agency based in Greenfield reported 90 full-time jobs associated with the $245,000 it got for its preschool Head Start program. That averages out to just $2,700 per full-time job. The agency said it used the money to give roughly 150 staffers cost-of-living raises. The figure reported on the federal report was a mistake, a result of a staffer’s misunderstanding of the filing instructions, said executive director Jane Sanders. Several other Head Start agencies also reported using stimulus funds for pay raises and claimed jobs for it.

In Texas, there are many similar concerns. According to Dallasmorningnews.com, reports that Texas has created or saved 19,752 jobs might also be an overstatement:

More than one-quarter of those jobs, or about 5,100, were summer positions for people 24 and younger. In Dallas, "a couple of handfuls, maybe 25," found permanent jobs as a result of the experience...

Since Texas did not need to spend stimulus funds to maintain its education system like other states, Texas used $2 billion to give teacher raises of $800 each.  Some of the education stimulus money is going toward creating new positions according to the Houston Chronicle.  They report that the federal “stimulus saves or creates 4,000 Texas education jobs.”

Questions must be asked in the aftermath of the Stimulus Act.

  • How do the states who created new positions with the funds continue to pay for those positions after the stimulus money runs out?
  • How do the states who used stimulus funds to pay for raises maintain those raises in the years to come?
  • How did President Obama arrive at the 1 million jobs saved or created tally when it is not reflected in the totals on the government’s own website?
  • In the end, when all the over statements and other errors are corrected, will the final total of jobs saved and created be worth the $787 billion dollar price tag?
     
 
For more info: See Part 1 of this article

Comments

  • Ben 5 years ago

    You can't measure "saved or created", but all of that is taken into account in the unemployment rate, which shows the net gain or losss. We were told if we passed the stimulus the unemployment rate would not go above 8%. If we did not pass it the rate would go to 9%. Well, we passed it and it went to 10.2%, so by Obama's own numbers the stimulus made the unemployment rate worse than if we had done nothing. Regardless, the stimulus did NOTHING that it was supposed to do. NOTHING.