Did Obama’s Stimulus Package Cost US$278,000 per Job?

By: EW News Desk Team   Date: 5 July 2011

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05 July 2011

The recent Seventh Quarterly Report released by the White House’s Council of Economic Advisers has sparked a war of words in the US as politicians and political observers from the opposing parties battle over the interpretation of the report.

According to the report, the US has spent nearly US$666 billion dollars on the American Recovery and Reinvestment Act (ARRA) since 2009, with 2.4 million jobs having been created as a direct result of the ARRA.

Jeffrey H. Anderson of the Weekly Standard, a conservative publication, was the first to jump on the figures, reporting that the ARRA would have meant “a cost to taxpayers of US$278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus,’ and taxpayers would have come out US$427 billion ahead.”

The Weekly Standard article was immediately picked upon by Republican politicians such as House Speaker John Boehner who tweeted that the “economy would be generating job growth faster if Dems hadn’t passed the ‘stimulus’”.

Accordingly, the Obama administration has been quick to respond. White House spokesperson Liz Oxhorn pointed out:

“This study (by the Weekly Standard) is based on partial information and false analysis. The Recovery Act was more than a measure to create and save jobs; it was also an investment in American infrastructure, education and industries that are critical to America’s long-term success and an investment in the economic future of America’s working families. Thanks to the Recovery Act, 110 million working families received a tax cut through the Making Work Pay tax credit, over 110,000 small businesses received critical access to capital through $27 billion in small business loans and more than 75,000 projects were started nationwide to improve our infrastructure, jump-start emerging industries and spur local economic development.”

Similarly, Jack Tapper of ABC News noted that the math was “flawed” and that the figures did not include “the permanent infrastructure in the computation, thus producing an inflated figure.”

Nevertheless, some of the numbers in the report have been troubling. Unemployment actually rose during the stimulus period from 7.3 percent to 9.1 percent – failing to keep levels below the targeted rate of 8 percent. The US national debt has also risen from US$9.986 trillion to US$14.467 trillion and is expected to rise even further in the future.

Related: US National Debt Is a Ticking Time Bomb

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