CBO says stimulus may have added 3.3 million jobs

[dtotire]

CBO says stimulus may have added 3.3 million jobs

By Lori Montgomery

President Obama's much-maligned economic stimulus package added as many as 3.3 million jobs to the economy during the second quarter of this year, and may have prevented the nation from lapsing back into recession, according to a report released Tuesday by the non-partisan Congressional Budget Office.

In its latest quarterly assessment of the act, the CBO said the stimulus lowered the unemployment rate by between 0.7 and 1.8 percentage points during the quarter ending in June and increased the number of people employed by between 1.4 million and 3.3 million. The higher figure would come close to making good on Obama's pledge that the act would save or create as many as 3.5 million jobs by the end of this year.

The CBO said the act also increased the nation's gross domestic product by between 1.7 percent and 4.5 percent in the second quarter, indicating that the stimulus may have been the primary source of growth in the U.S. economy. The Commerce Department estimates that GDP grew 2.4 percent in the second quarter, a figure many economists expect to be revised lower in a report due out Friday.

The CBO cautioned that the the act's effects are expected to "gradually diminish during the second half of 2010 and beyond," leaving the private sector to pick up the slack in an economy that is already showing signs of deteriorating rapidly. On the bright side, the CBO revised the cost of the package downward: Originally estimated to cost $787 billion over 10 years, the stimulus was later estimated to cost $862 billion. But in the report released Tuesday, the CBO said it now expects the measure to cost only about $814 billion through 2019, with 70 percent of those costs incurred by the end of this year.


more:
http://voices.washingtonpost.com/political-economy/2010/08/cbo_says_stimulus_may_have_add.html

[ixion]

1. I want some of what they're smoking

sounds like it's powerful stuff.

[doc03]

2. I see nothing wrong with their analysis if you call

creating work (jobs). The difference I see is the what they use as the definition of the word (jobs). If you would call it "a specific piece of work to be done for a set fee", I guess you could call it a job. But if what they call (jobs) is a "position of employment", they are not jobs. I said this from the outset the stimulus will create work but not one job. As the Stimulus money runs out so does the work and employment, (no jobs) were created. The only way to create jobs is add more jobs to an already bloated government bureaucracy or stop sending them to other countries.

[Igel]

3. No, it's the reporters that are a bit off.

The report talks about their methodology, and the fact that if their data or their models are off then the figures they produce are wrong. They rely on historical data for their models.

The model used to predict the speed and intensity of the downturn in 2008 and early 2009 was found to be wrong in early 2010. It relied on historical data.

The past does not always predict the future.

Then there's the range, something like 1.4 to 3.3 million jobs. You always hear the high end when it suits reporters, the low end when that suits them. "Stimulus may have created fewer than 1.4 million jobs" would be every bit as accurate. (If I remember the low-end figure properly).

Then there's the quibble over "job": The report discusses the fact that some of the jobs "saved" or "created" would have found alternative funding sources. It also discusses whether or not they're included jobs that are partly funded, or mis-aggreggated temporary jobs into full-time equivalents.

Most of this doesn't make it into the articles you read. Critical thinking crucially looks at assumptions and reliability of data, both pro and con, and carefully watch how terms are manipulated; it also requires that you know enough about the field to gauge the reliability of assumptions and of the data. So we send reporters who have graduated from a journalism program in which the thing closest to science that they got was physics for poets to read, digest, and explain a CBO report.