Friday, March 27, 2009

AP: The White House Fudges Stimulus Estimates

The AP actually wrote some good analysis explaining how Obama's "Bold Claims of Stimulus Jobs Can't Be Measured"

Some of my favorite assumptions behind the White House's estimate of 3.5 millions jobs being saved or created:

  • For every two jobs directly created by the stimulus spending, a third job will be indirectly created. The 2-to-1 ratio is rough and varies considerably by sector.

  • A tax cut has only one-quarter of the value of a spending increase of the same size, in terms of expanding the economy.

  • Every dollar spent on unemployment benefits is worth $1.63 of quick economic expansion. Food stamps boost the economy even more.

  • What planet are these people living on?!

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