NYT Certainly Wrong on Stimulus
Senate Democrats want both a $200 billion deficit spending jobs bill, but they also want to appear as though they care about the growing national debt. Covering this dilemma for The New York Times, David Leonhardt wrote on June 1st:
Of course, even if the bill is not very expensive, it is worth passing only if it will make a difference. And economists say it will.
Last year’s big stimulus program certainly did. The Congressional Budget Office estimates that 1.4 million to 3.4 million people now working would be unemployed were it not for the stimulus.
But the CBO estimates are not based on reality. They are completely fictional estimates based on no real world data. CBO Director Doug Elmendorf has explicitly admitted it. The Heritage Foundation’s Brian Riedl reports:
CBO director Doug Elmendorf has finally conceded that they never actual examined this stimulus bills’ affect on the economy. Responding to a questioner following a recent speech, he admitted that the CBO’s jobs count was “essentially repeating the same exercise” as their initial projections. When asked if this means their jobs projections would have ignored any failures of stimulus spending to perform as CBO predicted, Mr. Elmendorf responded “that’s right.” (Exchange begins at 38:20.)CBO never actually counted the jobs. Nor did their analysis take into account the rising unemployment rate. Or the economic figures. Or how effectively the money was spent. They merely assumed this government spending “must have” saved 1.5 million jobs.
An asteroid could have destroyed the entire Unites States outside of Washington, D.C., and (as long as the money was spent), the CBO’s model would have still claimed the stimulus saved 1.5 million jobs.