Stimulus Creates 640,000 Jobs: A Big Lie

Econophile's picture

By Jeff Harding

The Daily Capitalist

The Obama Administration knows it didn't "create or save" 640,000 jobs but they use the Big Lie to justify the huge waste of taxpayer dollars through the $787 billion American Reinvestment and Recovery Act of 2009. But on Friday the government says that it did:

... The new data come from information tens of thousands of state and local governments, private companies, colleges and community groups submitted earlier this month to show how they are making use of stimulus funds. The White House said states with the highest unemployment rates reported 25% more jobs created or saved per capita than the nation as a whole. ...

Given that the documents represent less than half of the stimulus spending through the end of September, the White House sees the data as evidence that the $787 billion American Reinvestment and Recovery Act of 2009 has already created or saved at least 1 million jobs when tax cuts and other indirect effects are included.

The administration says that puts it on track to meet its goal of creating or saving 3.5 million jobs by the end of 2010, when the two-year stimulus has run its course.

"We're moving in the right direction. We're starting to make real progress on the road to recovery," Vice President Joe Biden said. "Quite simply, the Recovery Act is performing as advertised."

Then came a devastating investigative report from AP a day before the Administration's report that:

The government has overstated by thousands the number of jobs it has created or saved with federal contracts under the president's $787 billion recovery program, according to an Associated Press review of data released in the program's first progress report.

The discrepancy raises questions about the reliability of a key benchmark the administration uses to gauge the success of the stimulus. The errors could be magnified Friday when a much larger round of reports is released. It is expected to show hundreds of thousands of jobs repairing public housing, building schools, repaving highways and keeping teachers on local payrolls.

The White House seized on an initial report from a government oversight board weeks ago that claimed federal contracts awarded to businesses under the recovery plan already had helped pay for more than 30,000 jobs. The administration said the number was evidence that the stimulus program had exceeded early expectations toward reaching the president's promise of creating or saving 3.5 million jobs by the end of next year.

But the 30,000 figure is overstated by thousands - at the very least by nearly 5,000, or one in six, based on AP's limited review of some of the contracts - because some federal agencies and recipients of the money provided incorrect job counts. The review found some counts were more than 10 times as high as the actual number of jobs; some jobs were credited to stimulus spending when, in fact, none were produced.

Listen to some of the evidence AP found:

A child care center in Florida said it saved 129 jobs with the help of stimulus money. Instead, it gave pay raises to its existing employees.


Colorado-based Teletech Government Solutions had worked with the Federal Communications Commission to come up with a job count for its $28.3 million contract for call centers fielding consumer questions about conversion of televisions to receive digital signals. The company reported creating 4,231 jobs - the highest number listed in the first stimulus accounting - even though 3,000 of those workers received a paycheck for five weeks or less. ... Now the job count is being adjusted to less than 1,000... .

Koring Group also received two FCC contracts to help people make the switch to digital television. The company reported hiring 26 people for each of the two contracts, bringing its total jobs to 54 on the government's official count. But the company cited the same 26 workers for both contracts, meaning the same jobs were counted twice. ... The FCC spotted the problem and called company owner Steve Holland, who now says the actual job count is closer to five, not 54.

Officials at East Central Technical College in Douglas, Ga., said they now know they shouldn't have claimed 280 stimulus jobs linked to more than $200,000 to buy three semi-trucks and trailers for commercial driving instruction, and a modular classroom and bathroom for a health education program.

The San Joaquin, Calif., Regional Rail Commission reported creating or saving 125 jobs as part of a stimulus project to lay railroad track. Because the project drew from two pools of money, the commission reported that figure twice, bringing the total to 250. Spokesman Thomas Reeves said the commission corrected the data Tuesday and changed the total to 73.

The White House very quickly came out and said, "it had already corrected 'virtually all' the mistakes identified by the AP and that the discovery of mistakes 'does not provide a statistically significant indication of the quality of the full reporting that will come on Friday.'" This is hard to believe in light of the government's well known talent for diligence and accuracy.

First, Carnegie-Mellon University professor Allan Meltzer questioned the concept of "job saved." “How can anyone know that his or her job has been saved?” It's a loose concept, economically speaking because there is too much data to measure that would empirically determine what leads to a job or the loss of one.

Second, look at the "jobs" that we are talking about here in the AP report. These aren't jobs in the economic sense, only in the political sense. Governments don't create wealth, they only spend your wealth. Only private enterprise creates jobs. True, people are getting paid to do work, but if there were no real jobs in the market place to generate wealth to pay taxes, where would the money come from to pay government workers?

Third, these "jobs" go away when the government support goes away. If your money is taken from you by taxation and given to some government project, and the government project ends, and/or the project was wasteful, it's over. No one asks the question of what you would have done with the money taken from you. Would you have bought a product from private enterprise? Would you have saved it, thus creating capital for future use? Instead the money is sucked out of the economy and put to politically favored uses. I mean, call centers for the FCC to tell you that digital TV is coming?

But the government snapped back to tells us:

[T]he economy's 3.5% third-quarter growth rate as evidence of the stimulus's impact. The Council of Economic Advisers believes the Recovery Act contributed between three and four percentage points to growth in the third quarter. Without the stimulus, the economy would have expanded "little, if at all," the White House said.

This is also false. As I have pointed out, if Cash for Clunkers and reflating the housing bubble with tax rebates is real growth, then all we have to do is wait for the government to spend and everything will be alright.

Hats off to AP reporters Brett J. Blackledge and Matt Apuzzo.

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Anonymous's picture

The President says there is much more to be done, but cites the recent turnaround in GDP as a sign of better things to come, and notes the Recovery Act has now created or saved more than a million jobs.

Anonymous's picture

The President says there is much more to be done, but cites the recent turnaround in GDP as a sign of better things to come, and notes the Recovery Act has now created or saved more than a million jobs.

Anonymous's picture

The President says there is much more to be done, but cites the recent turnaround in GDP as a sign of better things to come, and notes the Recovery Act has now created or saved more than a million jobs.


lol then cry

Anonymous's picture

"Might as well face it we're addicted to loans but fortunately a rolling loan carries no loss" Just remember boys and girls, "Smile and the whole world smiles with you"

Rusty_Shackleford's picture

Face it.  We're fucked.

Hephasteus's picture

But we haven't even been kissed yet!!!!

bjennings's picture

Y'all are like grade schoolers in shock that an administration would actually try to sell it's agenda as if no other administration before ever attempted such a thing.  Do you honestly see things this way?  Oh well.  It suprises me that this type of stuff actually makes it into ZH.  And then I see the birthers showing up and it reminds me that nothing should suprise me.

Anonymous's picture

Poor silly little Obamunisto.

Anonymous's picture

I think what shocks people is that the gov't flat out lies (like promising very specific transparency like putting bills online for all to read). Then the reality hits: the Congressional leadership adds 3000 pages to the bill at 3am and the vote is taken at 8am. And finally, the media does no reporting but only parrots the gov't talking points.
It is so obvious, so blatant, so corrupt, even the cynical are taken aback.
Here's a cool headline:
• Obama urges Karzai to end corruption in Afghan government
So, why not just reverse the names?

tom a taxpayer's picture

Thank you, Jeff and the AP reporters. The government has no shame. No respect for citizens. The government continues to lie even when caught red-handed. The government believes that a good cause is served by lies, continuous lies, flagrant lies, all kind of lies as long as the lies serve the cause.

Anonymous's picture

Y'all have very distorted view of things to think that the Obama Administration would do anything other than sell their stimulus program as if every other administration before told the honest truth of everything. This is like listening to the rants of grade school children. Are you thinking that by calling this to our attention you are opening our eyes to the way things really are? Let me save you the trouble. I was born at night but it wasn't last night. I have a fairly good grasp on how things work.

Anonymous's picture

The Unemployed and the under-employed account for over a of 30% of America today - and that's just the working class of people that "Want to work"

Let's not forget about the zombies draining every dime of cash, equity, savings, available credit...just trying to hold on for that "next house" or that next "bid letting". (Realtors, Mortgage brokers, etc)

Don't even start with me all the mom's and dad's that were home managing the "Investments" or selling beanie babies, travel vouchers and lubes and pills on ebay.

HA! Not so much today

How many of them are ever going to be able to ask for unemployment benefits? About Zero!

We are toast.

JackTheTrader's picture

It's all fuzzy math manufactured to support the wasteful spending of tax dollars.  At some point this ponzi scheme will end and the market will collapse taking the average American down with it. 

Hephasteus's picture

What do you know about this "math"? You're supposed to just buy a calculator and do all your math on computer programs. Stop doing this math or there will be "trouble" Mister Jack.

Anonymous's picture

anyone who thought that the kenyan born indonesian citizen serving as faux president would tell the truth about the economy and lardonomics programs is a dumb bunny at best and a fucktard at worst....

and of course he had help telling lies....the question i have is did these organizations lie of their own accords or with help from rahm "fuck you" emmanuel.....

Anonymous's picture

So many broken windows, so little productive capacity

Anonymous's picture

The numbers for Wisconsin came out last week.

WI reported 8,000+ jobs "saved/created"--then admitted that 6,000 of those jobs were governmental--State, local, education.

trillionaire's picture

money spent / jobs created = cost per job
$787,000,000,000 / 640000 = $1,229,687.50


Anonymous's picture

Ya gotta love it we're losing 2000000 jobs a month and they expect us to believe they've created 650000. Lets see at least -2M/mo x 9mo = -18000000. Who believes this garbadge?

digalert's picture

This "saved or created" crap is about as worn as "saved from the brink" mantra, one day, maybe, they'll realize how stupid that sounds.

DaveyJones's picture

"saved or created" It all depends on your definiton of created. I think they mean out of thin air

Hephasteus's picture

No that doesn't sound stupid. I mean they moved the debt from the banks to the massively powerful, fit, responsible, manufacturing and productivity super hero's of the entire universe. The american people. YES WE CAN!!! We just gotta stop by duncan donuts on the way to work before we bust out 20 million cars and  100,000 million computer monitors and grow billions of chickens and cows from eggs or calves to full grown fatted up bristling with strungth steroid supositoried food.

Anonymous's picture

One thing I notice about the administration spokespeople out promoting these programs on the MSM outlets is that they are all totally cocksure of the correctness of the plans and the results. Only a liar is that cocksure of themself.

Hephasteus's picture

So they have a bad job creation yeild rate and half to throw the jobs in the trash can because they didn't work?

Anonymous's picture

Damn Obama--

Voted for you, believed in your promises of transparency and holding the crooks accountable, and all I see is obfuscation and LIES day in, day out!!

It is getting to the point where no one believes ANY report or statistic the government trots out, because you have continually shown the public it is more important for you to save your banking buddies and pad the pockets of Washington than it is to simply TELL THE TRUTH.

Yeah, we know the truth is, our financial system is the biggest ponzi scheme in the history of the world, but we would rather see you really solve the problems, than continue to allow these banks to engage in accounting fraud on a grand scale.

Show the people that you have some nutz buddy, stop the looting and start the prosecuting!!

Anonymous's picture

Fat Chance of that ...

Change you can believe !

Lawyers, Politicians, Liars and Thieves ... they are all one and the same...

Daedal's picture

"Voted for you, believed in your promises of transparency and holding the crooks accountable, and all I see is obfuscation and LIES day in, day out!!"

 The only thing that has remained the same is the belief that this time is different. Voters have a short memory. In 3 years you'll be listening to another chump promising you change. Vote for someone who understand what they're talking about (like Ron Paul), instead of someone who spews nice-sounding, but ultimately meaningless, blanket statements (like Obama/McCain).

My Ultimate favorite blanket statement: 'We Must Do The Right Thing!'

Anonymous's picture

I personally favor, "Let it not be said that we did nothing"

Chignos's picture

Fed at 0% interest rate tells you everything you need to know.  If common sense were out there in the media, we'd have trouble reconciling "saving" thousands of jobs while the unemployment rate is rising continuously.  Obama gets some sort of credit for this?   Why?  Because things aren't a whole lot worse?  Oh, ok, I I feel a lot better.

Anonymous's picture

Stop being so glass half empty, I think the correct term is "Better than expected."

Anonymous's picture

Even if you believe the lies, if you divide the stimulus dollars by the number of jobs, the performance of this program is abysmal.

chunkylover42's picture

The two-faced nature of the government explaining simultaneously that "the recession is over" and "we need more government spending because the economy is still weak" is really astounding.  Just once I'd like to see somebody call them on it.  Fat chance.

pooplagrande's picture

Sadly, I lose more and more confidence in the US Government on a daily basis. Why don't they just get honest (with everything) and get some respect.

Transparency?!? Really Obama? You're full of s*#$! Guess you are 'protecting' us?

Uh oh...will I be flagged now?!? They're after me man! ;)


Anonymous's picture

I feel sorry for the Free WiFi coffee shop you typed this from.

Oh you typed that at home? Good luck to you

Mad Max's picture

That sound you don't hear isn't black helicopters, don't worry.  It's probably a Predator getting a Hellfire locked onto you.

The "transparency" of this administration makes the previous nightmare of W. Bush look like it was run by the ACLU in comparison.

JohnKing's picture

The AP is reporting truth? That's the real news.