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May 28 2009, 12:50 pm by Derek Thompson

The Stimulus Is Lagging. Why is Obama Bragging?

One hundred days after the passage of Obama's $787 billion stimulus bill, the administration is on a bragging tour, saying they've saved or created nearly 150,000 jobs in a hundred days. It's true that 150,000 more employed Americans is a great thing and a cause for some celebration. But shouldn't we be celebrating a number three times higher?


Obama said the stimulus would save something like 3.5 million jobs in the next two years. Are we on pace? Math: 150,000 jobs in 100 days is 1500 jobs a day. At that pace, the administration will "save" around 270,000 jobs in its first two quarters and 540K in the first year. That's a big number, but it's not very big compared to the 1.5 million jobs the administration still claims it is on pace for saving or creating this year. As you can see, it's more like a third.

The administration claims that only 14% of the stimulus bill has been spent so far. That's weird, because it was pretty widely reported just two weeks ago that less than 3% of the stimulus money had been spent. I'm not sure which number is worse for the administration's bragging rights. If 14% spent resulted in only 150,000 saved jobs, then we're on pace for 1 million jobs saved, which is three to four times less what the administration hoped. If only 3% of the stimulus money has been spent, then the money is being spent way to slow to actually stimulate the economy.

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Comments (6)

southsidered

What a weak post. First, there's the silly assumption that a recovery proceeds at an even pace, creating X number of jobs per day, day in, day out. Then there's the maybe-sillier assumption that dollars spent immediately translate into some commensurate number of jobs, the moment the checks are cashed. I would expect a professional business commentator to understand that the issue is more complicated than the cocktail-napkin formulas you're using here. Surely you can do better than this.

Derek Thompson (Replying to: southsidered)

Excellent points. The job-saving/creating process could accelerate in the next 100 days. Totally possible. But the point of a stimulus is to work as soon as possible, right? The truly silly assumption would be that the point of rushing out a stimulus bill in the first few days of an administration is so that it might take effect in six months! So why can't we draw conclusions about the glacial pace of either the money being spent or the jobs being saved/created, especially when the administration is in the middle of a PR push to advertise their (I would say, objectively-)disappointing numbers?

mdb002 (Replying to: southsidered)

http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf

On page 4, Obama's stimulus plan impact is outlined. By the administration own BS they used to sell this plan, it should be having a noticeable effect now, not later.

southsidered (Replying to: mdb002)

Wrong. Their graph shows the unemployment rate continuing to rise until Q3 of 2009. Total job projections are for Q4 of 2010. That document doesn't say anything about any number of jobs created by May 2009. The only people expecting the stimulus plan to "work" in three months are Obama detractors, who are either ignorant or arguing in bad faith.

John Thacker (Replying to: southsidered)
The only people expecting the stimulus plan to "work" in three months are Obama detractors, who are either ignorant or arguing in bad faith.

Your comma is inaccurate.

I certainly wasn't expected the stimulus plan to work in three months. That's because I didn't expect the money to get out in three months. I expected most of it to be paid out once the recovery had started. That's why I thought that the stimulus plan was a bad idea, just as trying to use spending to treat a recession is in general a bad idea. The payroll tax cut is a fine idea.

Bababooey

I appreciate the scare quotes around the word "save".

First, anyone can throw up any old number and say he saved that many jobs because its impossible to substantiate. Second, saving a job doesn't mean net job creation: saving GM jobs inhibits the expansion & job creation by more prudent auto manufacturers not on the dole-- like Ford (while the increased spending reduces future GDP growth (and job expansion), per the CBO).

Last, saving a job may be dumb policy: Congress quietly jammed a repeal of Clinton's Welfare reform bill into the ostensible economic stimulus bill and probably "saved" lots of social worker jobs, but torpedoed a successful social program.