Brian Riedl of the Heritage Foundation has an easy-to-read explanation of why Obama’s claim that the stimulus saved 2 million jobs is hooey. For starters, it’s a bait-and-switch:
On the stimulus’s first anniversary, keep in mind one number: 6.3 million. That is the Obama jobs gap — the difference between the 3.3 million net jobs President Obama said would be created (not just saved) and the 3 million additional net jobs that have since been lost. By the president’s own logic, the stimulus failed. So Obama has shifted his argument. Sure, the economy lost jobs, he now says, but without the stimulus it would have lost nearly 2 million more jobs. This “it would have been worse” theory is completely unprovable. No one knows how the economy would have performed without the stimulus.
But the more fundamental problem is that there’s no evidence we’ve done anything but mush the jobs around from the private to the public sector. Riedl calls this “faith-based economics. The White House’s new estimates of ‘saving’ nearly 2 million jobs are not based on observations of the economy’s recent performance. Rather, they are based on the Obama administration’s unshakable belief that deficit spending must create jobs and growth.” If the government borrowed $300B to “create” jobs, then “the private sector now has $300 billion less to spend, which, by the same logic, means it must lose the same number of jobs, leaving a net employment impact of zero.”
But one need not have a sophisticated understanding of the flaws of Keynesian spending schemes (sometimes analogized to taking buckets of water out of one end of the lake to dump into the other end) to sense that the Obami are making stuff up — again. The public can see that unemployment is much higher than it was a year ago and much higher than the 8 percent ceiling Obama promised if the stimulus were passed. A huge majority of voters simply don’t buy what Obama is saying.
Obama feels obliged to justify his spending binge. After all, it’s the only piece of significant legislation he’s gotten through Congress. But it’s also become a symbol of his out-of-touchness and his propensity to substitute spin for reasoned policy. Moreover, by reminding voters of just how much money we’ve thrown onto the pile of debt, his stimulus-harping, I suspect, actually lowers public confidence in his handling of the economy. Goodness knows his approval ratings on the deficit and economy are already putrid.
Once again, Obama is trapped. Nothing substitutes for results — and especially not fake stimulus figures. So the public’s confidence in him deteriorates, Congress becomes more gun-shy, and nothing much gets done. Not a bad result if you think that much of what government does is unhelpful. But it’s kind of scary if you’re an incumbent lawmaker trying to convince voters to give you another term.