The Cost Of Obama's Stimulus Plan: $312,500 Per Job (Vote) Created Or Saved (And Guess Who Is Paying It)

Tyler Durden's picture

For those eager to put some math to the rhetoric coming from the White House over the president's jobs creation plan, and that should be everyone, here is a quick and dirty estimate based on the numbers being thrown around of a 2% GDP increase in year 1 and 1.9 million jobs created or saved... most saved, as in those you can't really quantify. Said otherwise, roughly a $300 billion increase in GDP yields 1.9 million jobs. So far so good.  Now since the president is proposing to pay for the program over 10 years, let's assume the $475 billion in direct expenses is financed for 10 years at 2.5% which adds roughly $120 billion to the total cost of the program. In other words, as the calculations detailed and show below elaborate, the overall AJA plan will cost $250,000 per job created (excluding the interest expense) and $312,500 per union job, er job created (including interest). And that's how much it costs for Obama to purchase one vote... created or saved. Keynesian efficiency strikes like a Swiss watch yet again.

As for the just as troubling question of who ends up footing the bill of this "fully paid" for stimulus act, here are the details.

Earlier today, the OMB director Jack Lew gave some so far largely missing information when he laid out how the president plans on paying for the Stimulus Act ( Specifically, Obama and his advisors believe they are "over achieving" by raising more ($467 bn) over 10yrs to pay for the jobs package now.
So on an annual basis, tax increases will be as follows: (86% limit of itemized deductions, 4% hedge fund managers, 8.6% oil & gas, 0.6% Corp Jets)
                                                                                        Per Year (Beg Jan 2013)
1) Itemized Deductions (ie $250k or higher income                       $40.0 bn
2) Hedge Fund managers                                                            $  1.8 bn
3) Oil & Gas Industry                                                                  $  4.0 bn
4) Corp Jet Depreciation                                                              $ 300 mm

(1) Limit on Itemized Deductions for those making above $200k & Families above $250 k  ==> will raise $400 bn over 10yrs ($40 bn/yr) (because you know anyone making over $200k is very wealthy)
(2) Taxing Carried Interest as Ordinary Income ==> will raise $18 bn over 10yrs ($1.8 bn / yr)
(3) Removing Oil & Gas Industry tax breaks ==> $40 bn over 10yrs ($4 bn / yr)
(4) Removing the favorable depreciation for Corp Jets (currently 5 yr depreciation) so it is the same as Commercial Jets (7yr depreciation)  ==> $3 bn over 10yrs ($300 mm per yr)


So, Keynesian effiency aside where the IRR on any new job creation is so negative our excel #Refs out, our far more important question is... how does anyone think this proposal has any hope of passage in a Republican controlled House?

Courtesy of John Poehling

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Peter_Griffin's picture

Sounds like a good deal.

dwdollar's picture

If you're in a union it's one hell of a deal. A lot of communities will be able to stop gap their budgets another year and keep their union workers.

On the bright side, it's another year without the cops going rogue and demanding tribute like they do down in Mexico.

DaveyJones's picture

I prefer another TARP so I can save foreign banker jobs and not even Know it

eisley79's picture

i am very anti-obama, but keep the math the same, you cant look at only first year job creation, and then 10 years of paying it.  If you look at the 10 years, you would have to look at the supposed 10 years of job creation as well.


That being said, you cant stimulate a dead economy, real job creation wont occur until the debts cleaned out of the system.  So, his job plan at most will slow the rate of job losses, not create more. 


But keep zerohedge on the facts, and dont delve into political propagandizing.  His plan doesnt even deserve a mathematical break down, cause its doomed to fail, weak numerical arguments just give the sheep room to argue...

Michael's picture

There will never again be real job creation in the USA thanks to NAFTA, CAFTA, GATT/WTO. The politicians shot themselves in the foot by passing  that un-fair trade garbage.

Job creation will only occur in the US again when the US eventually defaults on its debt and the rest of the world cuts this dead beat nation off from trade with them.

When the US is forced to manufacture for itself the shit it wants like shoes, socks, bicycles, and microwave ovens, that's when good jobs will be created, but not until then.

Michael's picture

Here's Ron Paul in 6/21/2000 C-SPAN, for a refresher course in unconstitutional trade agreements.

Ron Paul: "This is the size of the WTO treaty"

Tell me lies's picture

Michael, RP is not a zion bootlick. He has no chance and his ties to Carnival barker jones just kills his cred.

A.W.E.S.O.M.-O 4000's picture

That's still better than the negative 30,000 created by the Fed giving $15 Trillion to the very people who engineered this crisis.


But as my wife always says, what the fuck do I know.

sensei's picture

dwdollar said

On the bright side, it's another year without the cops going rogue and demanding tribute like they do down in Mexico.

We're getting awfully close to that situation.  This weekend my wife was a passenger in a car that got pulled over.  The cop issued my wife a ticket for not having her seatbelt on.  This was despite the fact that she clearly had her seatbelt on and had since she entered the vehicle.  The cop refused to listen and issued the ticket anyway.  It's an accusation that's impossible to fight in court.  You either pay it or get a warrant issued for your arrest. 

It's a little more refined than Mexican style extortion, but it's still harassment and extortion. 

citta vritti's picture

so why can't I green up arrow you?

MachoMan's picture

The cop should have a dash cam of the stop...  (at the very least).  Call the records department at the police station and get a copy.  If they don't have a copy or it was destroyed, use it against his credibility.  Also ask for a copy of the police report, if any.  Again, if there is none, use it against his crediblity.  If there were other passengers, have them testify.

Set the thing for a hearing...  it probably won't take 15 minutes (but you might wait hours to get on).

If you don't have anything better to do or it's just one of those principle things, then go plead not guilty and rock and roll...  before you do, might want to inquire as to the cost difference for having a trial in case you lose.

The thing about kangaroo courts, THEY HATE IT WHEN YOU FIGHT...  even if you lose, THEY HATE IT.  And, sometimes, you catch a favorable judge or whatever...

My advice is to talk to the prosecutor, get it reduced to a city ordinance violation or the like (just ensure it isn't going on your record) and pay the fine...  unless it's just outrageous (which I've seen that too, but I'm guessing sub $100).  Keep your nose clean for 6 months.  Game on.

PS, NEVER NEVER NEVER EVER get a ticket on your record.  The cops will give you a ticket EVERY TIME after that.

PS2, you can get creative with FOIA if you really want to push (e.g. any disciplinary actions against the issuing officer, etc.)

FreedomGuy's picture

I feel your pain. I hate stupid laws like the seatbelt laws. I think it is one of the most corrupting facets of our law enforcement, the raiding of the public for money. On any given day in any major city you could issue 50,000 tickets. The primary purpose of traffic stops is revenue generation. If you don't believe that then ask how often is the driving truly "dangerous" and if there was no fine how many stops would be made? Couldn't the officers who are theoretically our friends and neighbors just give warnings for the offense?

I drive about 50k miles per year and I rarely go six months or more without some kind of traffic stop. I carry radar detectors in all my cars and I recommend them to all my fellow citizens. You have to defend yourself from the State. Even if you consider yourself a safe reasonable driver (and I do) you have to give yourself warning so you can check your speed so you don't get caught not paying attention. Your insurance company loves tickets too as they are an excuse to issue massive rate increases. It's a sort of partnership with the State.

The other side of this issue is that we have to give up writing infinite amounts of "rules" versus laws. I define laws as things that protect person, property and natural rights. Rules do none of those but are things that are simply deemed good for us. It could be making salt illegal in NY, seatbelt rules, helmet rules, virtually all business rules that stomp on the 1st Amendment, etc. We enslave each other with a web of these stupid things and we give the State and its police forces reasons to apprehend, harass and fine us.

Say whatever you want about any corporation or business but they don't have the power to arrest, fine, harass and rule least not without the cooperation of a government we have ceded those powers to.

kill switch's picture

And the interviews are where??

MiguelitoRaton's picture

The costs will also be offset by the taxes paid by the newly employed (revenue) and the savings (reduced unemployment for those newly employed)....for maybe 9 months and then they are all unemployed again and the nation has a huge debt to repay....sigh. It all sounds so good when Obummer says it, reality sucks folks.

erg's picture

Ya just gotta love those saved jobs. Based on some ephemeral, misty-eyed metric.

Meanwhile the whole house of cards shivers with abuse and neglect.

Harlequin001's picture

You'd think they'd learn at some point. Portugal tried creating jobs by building roads and bridges to stimulate its economy. The result was that an economy that couldn't sustain itself before the building still couldn't sustain itself after the building, funny old thing, and the Portuguese Government had to contend with riots when they were eventually forced to introduce tolls on those same new roads paid for by taxpayers to raise new funds to maintain and repair them.

Utterly fucking stupid, but what can you do to stop these cretins when your rights have been taken away through law such as the Patriot and anti terrorism Acts?

Like it or not, terrorism is the only solution for a true patriot of whatever nationality in a world where the little guy has no say whatsoever...

Perhaps we need to rethink about the spin we are fed through the press.

jakethesnake76's picture

oh yes the old perpetual motion Keynesian machine i forgot how that worked lol

berlinjames02's picture

I was waiting for a post like this. After O-bama presented the idea, I pulled out my handy TI-82 and performed 2 quick calcualtions:

1) $447 billion / 330 million = $1,354 per PERSON in the US. Thus, a family of four's portion of this wonderful plan is about $5,400.

2) $447 billion / $14.3 trillion = 3.1%. If all this money is spent, it would provide that much 'stimulus' to the economy. The funniest part about this calculation is Mark Zandi came out and said he predicted the bill would provide 2% growth. How's that for a Keynesian multiplier effect??

Augustus's picture

There should be an additional step.  what percentage of the families of four are paying taxes?  That is about 50%.  So the TAXPAYER Familhy of Four will have a bill for nearly $11,000, before compound interest.  That would be enough to set up a real nice college fund at birth for one of those children. 

rufusbird's picture

Perhaps in the future, Presidential candidates should have to pass a basic math abilities test.

topcallingtroll's picture

Yeah I think politicians understand math quite well.

A Nanny Moose's picture

I thought it was just me. Spending $450 bln (3% of GDP) to get $300 bln (or 2% GDP growth) didn't add up. If this doesn't demonstrate the black hole of government spending, then I don't know what will. Of course peoples are not so good with the maths.

A Nanny Moose's picture

I thought it was just me. Spending $450 bln (3% of GDP) to get $300 bln (or 2% GDP growth) didn't add up. If this doesn't demonstrate the black hole of government spending, then I don't know what will. Of course peoples are not so good with the maths.

topcallingtroll's picture

Technically there is a cumulative growth over ten years with two percent additional growth compounded annually, so the real math for you math challenged people doesnt look quite that bad.

However the inefficiency drag of having government make capital allocation decisions means that we will actually grow less than if the government had allowed price signals to allocate capital, so the whole thing is a joke and makes us worse off, in ways not visible.

Of course the smiling union faces and puff pieces in the nightly news about a family getting a stimulus job will be highly visible.

I get it now that there is no hope. Our fate is sealed. It is just a matter of timing.

AldousHuxley's picture

Instead if just 10% of working citizens out of 300M donated $1000 per person you'd have 30,000,000 x 1,000 = $30BILLION to donate to a presidential candidate of their choice to get rid of banksters, illegal aliens, an dbring the middle class back.

JohnF's picture

Doesn't quite add up: there are 330mn US residents of all ages - not citzens all, mind you, and I've included estimates for the illegals - and around 155mn workers. Hence you'd have $15.5bn.

You can transfer that to my Caymans account. Thanks! :-)

Seriously: even $100 per worker would get you $1.55 bn. Then again, that's probably what the Democrats will spend in their attempt to get President Obama re-elected...


FreedomGuy's picture

So it's that easy!?!? All we had to do is hire teachers and firefighters and build some schools and the whole damn economy will recover? Really?!? Next time maybe we hire plumbers and auto mechanics and build day spas and then the whole economy will recover. After that I think janitors and chemical engineers while building playgrounds. Still, perhaps some farmhands and insurance salesman while building more outhouses. This economic stimulus thing is so easy even a child can do it! Who would've thought?

Let's cut all SS taxes, all Medicare taxes, no gas taxes and double Federal spending, too! This stuff is easy when you don't have to balance the books. We are a AAA credit rating always. I heard Obama and Timmy say it.

Seriously, this stuff is so completely, stupendously, moronically, collosally, thoroughly stupid that only utopian dumb ass keynesian modern liberals could believe it.

We are circling the drain, my liberty oriented friends. The dumb asses are in charge and they think they are brilliant. This is what happens when you give stupid people power over you...all the way from the TSA groper to the dumb ass egotist in chief. The greatest lie in history is that we need people to rule us.

NumNutt's picture

God almighty, please put a 20,000 gigawatt bolt of lightning in Obama's ass......Amen...

FreedomGuy's picture

Could we have most his staff standing near in a puddle of water, too, lol?

Jena's picture

Uhm, and President Biden?

erg's picture

Awesome. I've used this too. From where is it? Parsing...Bart. A perfectly crommulent word, unpossible.

greased up deaf guy's picture

yes :). i'm too lazy to look up the specific episode. i believe it was the christmas one where bart accidentally burned the tree down and melted their gifts. crommulent indeed.

treemagnet's picture

I'm gonna have to let Obama go, I just can't afford him any longer.

max2205's picture

It's time to kill the term 'created or saved' like we killed ' hope and change'

Thank you very much

DoChenRollingBearing's picture

Green for treemagnet and max.

You're welcome!

TexasAggie's picture

Jobs saved is the same as proving a negative; both are impossible.  In addiiton, on Follow the Money tonight, a spokeman for Center for Progress (A liberal tank-George Soros backed) kept saying that the CBO had come out with numbers touting the jobs saved by the previous 847B stimulus.  However, I don't have the numbers, but I'm sure some of hte smart people can get the numbers and this should be used in all campaign ads next yr: Jan 2009, total number of jobs in the US, Aug 2011 - total number of jobs.  How can you have saved jobs at $847B when several million less have jobs.

  BLS numbers Total Civilian Employed Unemployed Not in Labor Force Grand total Jan-09 142099 11616 81023 234738 Jan-10 138333 14837 83663 236833 Jan-11 139323 13863 85518 238704 1-Aug 139627 13967 86278 239872

2.3MM less jobs, and 5MM more not in labor force (this does not include the partially working - looking for full-time work).

citta vritti's picture

Announcer - "And what do we have for our lucky prize winner today?"

Mrs. Kresge - "But, but, this is nothing but a piece of shit."

Announcer - "Yes. But it's great shit, Mrs. Kresge."

Firesign Theater

JohnG's picture

No shit.  Watch the producers go Galt.  It's already happenning in my neck of the woods.

Fuck it, why try anymore.  It'll just cost more blood, sweat and tears, and it's just not worth it.


I'm waiting for the elections...if O'fuckmy children gets reelected (Iand I think he will UNFORTUNATLY), that's it, I close it all, jobs GONE forever, cash out and leave. Done.

Fucking tired of this shit I am, and I'm not the only one by a long shot.

berlinjames02's picture

O-bama is a fucking idiot. The dumb ass can't see that he's created the unemployment mess because of healthcare. It's painfully obvious to every business owner. Why hire anyone when the costs of healthcare are so uncertain?? I had dinner with my father and his accountant a couple weeks ago. That was their concensus after talking with their small business colleagues.

JohnG's picture

I cannot disagree.  This is just plain idiocy.  I'm about done.

FreedomGuy's picture

It's not just the healthcare. It's everything. See me earlier post. Whatever can move away from the USA will move and the rest will suffer and slowly die. The tax code will have a million pages of extra taxes and counter it with tax incentives, like hiring left handed, paraplegic, minority, unemployed more than six months on Tuesday...but not if they are asian ambidexterous, IQ more than 102, born on odd numbered months as an except to paragraph...

Remember, though, it's all designed by geniuses and its good for us...or else.

unerman's picture

The USA will miss your $1.32. Don't let door hit you on way out.

JohnG's picture

It's more like 2.7M this year so far.  And fuck you.

tarsubil's picture

Good for you that you're still here. I would have bunkered a year ago if I had that kind of cash.

assembler's picture

Watch out for "unerman", he has his head in a bag.

Chingalay's picture

It is happening here also. Closed my business three months ago after 14 years. New Laws and regs over time killed it. Won't invest one more dime in a traditional sense. I hear ya JG. I am Fnnn tired of it as well.

JohnG's picture

I hear you.  Plain tired of losing sleep.  It's that bad, and I can take a great deal of shit, always have.  Just about done with it.  Like my Grandma Lucy said, "I just want to get out of it."

The thing that kept me going to far is my people, thier families and children.  It's getting to be too much for me.

That's a sad statement,