Critics — including many Republicans and some economists — have questioned President Obama’s assertion that the economic stimulus package will create or save 3.5 million jobs.
It is exceedingly difficult, they note, to prove that a job was “saved.” “If we lose over a million jobs since the stimulus passed, the administration can still claim to save 150,000. ‘Save’ is a communications department’s greatest ‘saving grace,” the office of House GOP whip Eric Cantor said in an email today.
The skeptics are sure to have a field day with the new report from the president’s Council of Economic Advisers that revises the estimate of job creation from the $787 billion stimulus package.
Besides repeating the 3.5 million jobs figure as of the fourth quarter of 2010, the report introduces a new number — 6.8 million “job-years” saved or created hrough the end of 2012.
“For some purposes, looking at the effects at a single point in time is not the most useful approach,” the report says. “Since the economy is likely to be operating below capacity for several years, job creation at any time over the next several years is valuable.
“Thus, a second way to look at the employment effects of the program is to estimate the number of job-years the program will create over the President’s first term. A job-year means simply one job for one year.”
The job-years include “direct jobs” created by government-sponsored projects, “indirect jobs” created at suppliers who make materials used in projects, and “induced jobs” created elsewhere in the economy from increased spending by workers and companies.
Americans for Tax Reform, a group critical of Obama, noted that federal statistics show 1.9 million jobs lost since Obama took office.
“Obama and his economic advisors have resorted to the invention of highly questionable new metrics such as the number of ”saved’ jobs and – making its debut today — the number of ‘job-years’ created,” the group said today.
It cited Senator Max Baucus, chairman of the Senate Finance Committee, responding to Treasury Secretary Timothy Geithner during a hearing: “You created a situation where you cannot be wrong. If the economy loses 2 million jobs over the next few years, you can say yes, but it would’ve lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You’ve given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct.”
Estimates of job creation from the American Recovery and Reinvestment Act of 2009