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Stimulus Boosted Jobs in 2nd Quarter, CBO Says

Let me point out once again, this excerpt from the report:



What this report can not tell you is, how many jobs would have been created in the economy over the last year and a half if the stimulus was never passed. Without that information, those numbers are meaningless.
ahhhh slab just when i got all excited that something good was happening -.- i hate politics yet im addicted to it. fml
 
ahhhh slab just when i got all excited that something good was happening -.- i hate politics yet im addicted to it. fml

I know how you feel. Information can be spun in either direction and I keep that in mind when reading things like this. That also goes for reports that support my political beliefs also. When all else fails and I can't determine which side has it right, I fall back on history.

I believe the CBO itself, is one of the most non-partisan and trustworthy agencies in the government. The reason for that is because they only allowed to do, what they are told to do, and aren't allowed to expand on their scope. If they were allowed to expand on things, then partisan preferences would come into play. That's why it is so important to read what factors the CBO uses to determine their results, what factors are not considered, and how varied the actual results could be based on those considerations.
 
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They are given parameters by the ones who make the request. They are told what to include in their reports, what to omit, and often told which sources they can use as a basis for them.

The CBO is not allowed to broaden the scope of a report, even if in doing so, it would significantly alter their findings.

Although CBO is given the specific question to answer, CBO is not told how to answer that question. CBO's response is independent.

That's why their reports include so many "what if's" and explanations for their findings.

CBO, like any entity trying to make a forecast, has to work with incomplete information, make assumptions about the current and future environment, etc. Laying out scenarios and mentioning variables that might have a significant impact makes good sense.

We saw this with Obamacare. Their reports prior to it's passing that were requested by the administration and democrats on capitol hill, painted a very rosy economic picture for America if the legislation were enacted. After the bill was passed, they were requested to do several other, more broad studies on the Obamacare bill, and every one that has been released so far, has contradicted or greatly reduced the positive benefits they reported initially. That's because their scope was severely limited before by the administration.

As more information becomes available, initial ideas can change. Long-range forecasting is very difficult and imprecise. For example, if one is trying to project the budget deficit for 2020, one needs to have a reasonable idea concerning the macroeconomic environment.

What will the GDP be in 2020? Historically, one can assume at least one and perhaps two additional recessions from now until then. But how deep? Keeping current law fixed, one could then estimate revenue and expenditures? But what if there is a geopolitical shock? Certain expenditures might rocket well beyond what current law would have them. What will interest rates be? Given the nation's sizable and growing debt, one needs to understand the structure of the nation's debt and relevant interest rates in order to assess interest payments.

If one looks closely at CBO's forecasts, one finds that beyond the short-term, CBO reverts toward what is believed to be stable state figures i.e. nominal GDP grows by 4.4%, 4.3%, and 4.3% in 2018-20; Real GDP grows by 2.3%, 2.2%, and 2.2% in that timeframe; Core CPI is at 2.0% each of those three years; the unemployment rate is at 5.0% during those three years, etc.

Why? Because errors are likely to be smaller if one assumes a stable state toward what are believed to be sustainable figures.

Nonetheless, sizable errors could still result. For a simple illustration, let's say tax revenue amounts to about 18% of nominal GDP under the current tax law framework. Nominal GDP was about $14 trillion in 2009. Over the past 20 years, nominal GDP expanded at an average rate of 4.8% per year.

What would happen to tax revenue if annual growth amounted to +/- 0.5% from the above average?

5.3% annual growth: $4.45 trillion tax revenue
4.8% annual growth: $4.22 trillion tax revenue
4.3% annual growth: $4.00 trillion tax revenue

In short, average annual growth of +/- 0.5% from the 20-year annualized figure would create a difference of $450 billion in 2020 revenue.

Needless to say, CBO's models are more complex. Nonetheless, assumptions toward a stable state are made as one extends farther out along the time horizon.

In reality, CBO has erred on the side of optimism (lower net costs/greater net benefits/policy makers will deliver on program constraints). That is a human bias, not something that is unique to CBO. In practice, that has led to CBO's often underestimating the growth of major programs. The recent "doctor's fix" in which both parties overwhelmingly voted to waive a very modest budget-saving mechanism provides just the latest example of policy makers choosing not to be bound by fiscal constraints. Hence, an approach that followed the current law would have missed the extra increase in the budget deficit that resulted under a bipartisan move to avoid modest fiscal constraints.

Indeed, given past history, CBO should probably print a disclaimer highlighting budget constraints under existing law and explaining that policy makers have typically failed to remain bound by those constraints.
 
What this report can not tell you is, how many jobs would have been created in the economy over the last year and a half if the stimulus was never passed. Without that information, those numbers are meaningless.

Not exactly. It cannot provide a decent estimate only if it relied on output and employment data. However, by using revenue and spending data, it was able to make estimates using its various models.
 
Don-

Are these tallies on jobs calculated using the White House's revised method of counting job creation?

http://www.debatepolitics.com/gener...-white-house-changes-stimulus-jobs-count.html

The Obama administration is changing the way it counts jobs created or saved by stimulus spending in a way that will make the programs look far more successful.

Under the old rules, only jobs that were actually newly created or not lost because of stimulus money were counted. Now the administration plans to count all jobs for projects funded by stimulus money—even if that job already existed and the person was never in danger of losing the job.
 
okay wow... so didnt see your cnn list there GRIM17 uhhh well some of the things on that list are really essential. the whole going green thing im so for it. it helps out the environment as well as the wildland fire management on forest service lands. gotta keep the forests alive somehow.


idk even know what it is nor am i going to google it. it just sounds retarted.


wow... really? really? well at least we save more money then the government spending money on gas :D so theres a lot more money back in the pocket ;]

And pollute the air even more with Lithium Ion batteries for those cars. Yes, great plan :roll:

How about addressing the rest of the pork in his post?
 
No. CBO's estimates are completely based on what its models showed, not White House estimates.

The estimates were from the CBO, but I believe the model they used was the revised version that the White House came up with.
 
Even if the economy does turn around, wouldn't it have turned around without the stimulus package? Was it worth the price tag?
 
Even if the economy does turn around, wouldn't it have turned around without the stimulus package? Was it worth the price tag?

more than likely, hopefully the stimulus will have helped hasten the process though..
 
As long as the CBO is only allowed to use Keyensian economists to formulate its conclusions it will always be skewed.

I'd like to see a report with a more narrow window of what was supposedly created in jobs, as opposed to the aggregate number of unemployment claims for the same period. I bet it'd be a net loss.


j-mac

I'm wondering if their computer model is any better than the one used for climate forecasts........ probably not.
 
The estimates were from the CBO, but I believe the model they used was the revised version that the White House came up with.

I don't know what the white house version was, but according to the paper don cited (in the appendix) the CBO drew heavily from two different commercial forecasting models. One from Macroeconomic Advisors and Global Insight, and the other from FRB-US (which is used at the Federal Reserve). They also drew from several journal articles that detailed research involving assumptions and multipliers, and also from historical data.
 
why, certainly, the stimulus worked!

we can all feel it working

unfortunately, EIGHT HUNDRED AND SIXTY TWO BILLION DOLLARS later, not enough of us are (working, that is)

indeed, we readers learned yesterday that the stimu... (excuse me, we really shouldn't use that word, obama hates it, he prefers recovery act) cost in toto MORE than seven years of w-stands-for-what's-his-name's war which w had to LIE (our elitists' favorite word) to get us into

and you know who says so, are you interested to learn exactly who is the source who reckons the iraq war cost exactly 709B---why, it's none other than mr elmendorf, the moderate and measured mathematician himself

Little-known fact: Obama's failed stimulus program cost more than the Iraq war | Washington Examiner

the cbo also, you recall, assured us all that obamacare would save us 100B

even the interest groups have conspicuously scuttled that pitch

Dems retreat on health care cost pitch - Ben Smith - POLITICO.com

the white house, too---don't talk health care, leadership demands of its candidates

Democratic candidates ignore legislative successes - latimes.com

to be fair to mr elmendorf, it is rather difficult to forecast the gdp in 2020 merely by reading entrails

but wasn't obamacare passed just a few months ago?

ie, that was fast

meantime, michael bennet says---trillions spent, NOTHING TO SHOW FOR IT

Yahoo! Message Boards - General Electric Company (GE) - Dem Sen: Trillions in Debt, 'Nothing to Show for It'...

ouch

do you know michael bennet?

why would he say such a thing?
 
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The report notes, however, that the Recovery Act's effect on output will gradually diminish during the second half of 2010. The law's effect on employment and unemployment will wane gradually in 2011 and beyond.

Funny how that was left out of the OP.

Why? It's obvious that such an outcome would happen. Don generally doesn't post the blatantly obvious. Just as Reagan cut military spending down, the impacts from decreased federal outlays reduce activity. What's funny is you thinking that what you posted is ground breaking.
 
There's a significant difference between saying:

The Stimulus was a success
The Stimulus had a short term positive affect
The Stimulus had a positive effect
The Stimulus had a short term positive affect but not worth the long term potential damage
The Stimulus did some good but was inefficient
The Stimulus did some good but could've been done in a better fashion

All of those acknowledge what is basically said there, "Hey, if you look at last year and compare last year with stimulus and without, with would've been better", but as you diverge from that there's a lot of different ways it can go.

I think those saying that its done NOTHING good are being a bit ridiculous, I also think though often times people are using exaggerated hyperbole when they say the Stimulus has done nothing good where in reality they're saying their overall view (including efficiency, long lasting effects, etc) of it is negative.

Personally, I'm in that later half of those above.

Now I do have a question for Don in regards to his list he posted, specifically concerning the tax cuts:

Two-year tax cuts for lower- and middle-income people: 1.05
Extension of first-time homebuyer credit: 0.55
One-year tax cut for higher income people: 0.40
Corporate tax breaks: 0.20

What is the "spending" part of this equation for these things? Its obvious with transfer payments, the government is GIVING people money. However the government isn't "spending" anything by not taking additional money, so what is this .20 or .40 or 1.05 coming from in relation to the [spending] * 1.5 equation?
 
Why? It's obvious that such an outcome would happen. Don generally doesn't post the blatantly obvious. Just as Reagan cut military spending down, the impacts from decreased federal outlays reduce activity. What's funny is you thinking that what you posted is ground breaking.

Then explain what the point of spending billions for a gain that will dissappear in a few months is O Child.
 
Then explain what the point of spending billions for a gain that will dissappear in a few months is O Child.

To jump start the economy. Really, this isn't hard at all. Was Bush's bonus depreciation suppose to be the lasting boost to the economy? No. It was to get corporations to spend money on investments which would jump start the economy. No one, I repeat NO ONE argued that the stimulus would last for years. The very WORD stimulus does not suggest what you are saying.

Wow, temporary spending meant to jump start the economy doesn't last?

Wait. I don't know what "temporary" means.

If you think that the stimulus had no beneficial effects, then you must believe Reagan's massive expansion of the military did not cause defense contractors to grow and boost spending down the supply chain. You'd be 100% wrong, but that's your right.
 
This number is meaningless it's like spitting in the Ocean and claiming you raised the sea level.


The following are the figures from National Unemployment Summary of the National Conference of State Legislators.

Unemployment rose slightly in August, 2010, to 9.6%. Unemployment has largely held steady in 2010, with a 9.7% unemployment rate for the first three months of the year, a slight increase to 9.9% for April, a drop back to 9.7% percent for May and another slight decrease, to 9.5% for June and July.

http://www.ncsl.org/?tabid=13307

This clearly says no meaningful change this year so far.

The stimulus has been a giant waste of billions of Obama bucks.

L.A. got $111 million dollars and created a whopping 54 whole jobs. And that is typical of how the money has been spend in case after bloody case.

Obama is a failure in the first damn degree.
 
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This number is meaningless it's like spitting in the Ocean and claiming you raised the sea level.


The following are the figures from National Unemployment Summary of the National Conference of State Legislators.

Unemployment rose slightly in August, 2010, to 9.6%. Unemployment has largely held steady in 2010, with a 9.7% unemployment rate for the first three months of the year, a slight increase to 9.9% for April, a drop back to 9.7% percent for May and another slight decrease, to 9.5% for June and July.

This clearly says no meaningful change this year so far.

The stimulus has been a giant waste of billions of Obama bucks.

L.A. got $111 million dollars and created a whopping 54 whole jobs. And that is typical of how the money has been spend in case after bloody case.

Obama is a failure in the first damn degree.
That is a load of bs

Unless you factor in how bad the economy would or could have been without the stimulus your analysis is pure garbage
 
we know what would have happened in LA had the stimulus not been passed

That article was a failure to understand the flow of money. What they are looking at is direct spending to save or create specific jobs within those divisions. It completely ignores the impact of the money on the rest of the local economy. That $111 million was spent within the greater LA area. Basically, it's like saying that one jet cost $15 million and only saved 4 jobs at the manufacturing plant while ignoring the fact that the money went down the supply chain, producing jobs at raw material and part manufacters.

Assuming a 50% MPS, somewhere around I'm venturing $300 million got spent within LA. And that definitely boosted activity within the area.
 
Unemployment rose slightly in August, 2010, to 9.6%. Unemployment has largely held steady in 2010, with a 9.7% unemployment rate for the first three months of the year, a slight increase to 9.9% for April, a drop back to 9.7% percent for May and another slight decrease, to 9.5% for June and July.

Nice job leaving out the fact that layoffs have dramatically declined. Dishonest? Absolutely. Partisan? Absolutely. What does that mean? That people previously who gave up on jobs are now entering the job market. That does not suggest the economy is worse off. It suggests that the economy is getting better. Millions of people don't rejoin the job search if they feel that the economy is worse.

This clearly says no meaningful change this year so far.

Um, not really.

The stimulus has been a giant waste of billions of Obama bucks.

That's largely because you don't understand economics.

L.A. got $111 million dollars and created a whopping 54 whole jobs. And that is typical of how the money has been spend in case after bloody case.

So you believe that the rest of the money literally went nowhere and did not impact the economy at all?

Tell me, the US buys 100 F-15s from Boeing. Boeing hires 45 people to build the plans. Have only 45 jobs been created? Let's see if you can answer this intelligently.
 
That is a load of bs

Unless you factor in how bad the economy would or could have been without the stimulus your analysis is pure garbage

I will keep that in mind when the Libs whine that the Bush Tax cuts did nothing to help the economy
 
I will keep that in mind when the Libs whine that the Bush Tax cuts did nothing to help the economy

And who ever said that? Or are you making **** up again?

What liberals complain about (and fiscal conservatives as well) is that the cost of the tax cuts were massive.
 
it's pretty clear

According to the report, the Los Angeles Department of Public Works generated only 45.46 jobs (the fraction of a job created or retained correlates to the number of actual hours of work) after receiving $70.65 million, while the target was 238 jobs.

Similarly, the city’s department of transportation, armed with a $40.8 million fund, created only 9 jobs in place of an expected 26 jobs.

The audit says the numbers were disappointing due to bureaucratic red tape, absence of competitive bidding for projects in private sectors, inappropriate tracking of stimulus money and a laxity in bringing out timely job reports.

even the targets cited are obscene, 40.8 for 26 workers is over 1.5M per

sorry
 
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