Friday, May 27, 2011

Did the Fiscal Stimulus Cause a Net Loss of Jobs?

Ohio State University economists Tim Conley and Bill Dupor have done a study of the impact of the fiscal stimulus embodied in "The American Recovery and Reinvestment Act." They concluded that the Act created or saved 450,000 state and local government jobs but destroyed or forestalled a million private sector jobs. Investors' Business Daily editorialized "That's a net loss of half a million jobs."

The working paper, "The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled",  bases its statistics analysis on a cross-sectional analysis by the state and a program.

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ICT observer said...

1/2 a million govt. jobs are saved at the likely cost of 1 million private sector jobs that are not visible. This presumes that the OSU scholars were correct. Sadly, I suspect that they are, or are understating the private sector damage.

The economy would be recovering except for the continuing economic damage being created by Washington. The monumental uncertainty is continuing as uncertainty over implementation of "Frankndood," "obamacare," and the debt ceiling circus continue.

When politicians make all of the rules, then everything becomes politics (see Carville definition--'poli (many) + bloodsucking insects). The great Recession continues.

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