Show Me the Jobs

This is a new year but it seems like the same old discussion is taking place in politics and that is where the jobs are. It is time for the politicians who voted for and against the unprecedented stimulus plan last year to show the American people where the jobs are. Last year's stimulus package spurred up to 2 million more jobs than the country would have had otherwise, the White House said earlier this month. White House Council of Economic Advisers Chairwoman Christina Romer called it "truly a stunning, important effect of the act."

However she needs to try telling that to the 10 percent who are unemployed and many critics argue that President Obama's stimulus efforts haven't worked and shouldn't be expanded on in the new legislation he is requesting this year in the form of the Jobs for Main Street Act which is just a continuation of the same policies that Congress passed in last year’s stimulus package.

Still a CEA report released said about half of the $787 billion stimulus bill enacted last year is spent or already promised. The stimulus bill added between three and four percentage points to economic growth during last year's third quarter and between 1.5 and three percentage points in the fourth quarter, according to the report. While Republicans have called the White House claims overblown. But Romer cited similar figures on jobs and gross domestic product growth from the nonpartisan Congressional Budget Office and private industry experts.

While Rep. Darrell Issa of California, the top Republican on the House Government Oversight Committee, wasn't buying it. "What's the American public going to believe? Self-serving and deceptive numbers being put out by the White House on the stimulus, or the numbers that say we're at 10 percent unemployment when the Obama administration promised the stimulus would keep it below 8 percent? Another word for it is 'propaganda,' " Issa said.

Regardless if you are a Republican or Democrat, the fact is that the jobs figures have become a political football just as Congress gears up to consider a White House request for more stimulus money for infrastructure programs like road building. Obama had promised 3.5 million jobs from the first stimulus bill. But the recession has proved a more difficult adversary than expected. In December, another 85,000 jobs were lost. But Romer said the economy was losing an average of 691,000 jobs a month in the first quarter of last year. "In the absence of the recovery act, we would be 2 million jobs lower than we are now," she said. "It has done exactly what we anticipated it would do."

Therefore the jobs battle is one that will be watched as we head in the midterm elections of this year. Many politicians will champion that without the stimulus package things would be worse while other will argue that the stimulus package hasn’t done what it was intended to do. No matter which side of the debate you are on, the fact is that with an official unemployment rate of 10 percent and an unofficial rate of close to 20%, it is clear that something has to be done about job creation in this nation that the original stimulus package failed to do in the first place.

Dean Baker, co-director of the Center for Economic and Policy Research, said the job figures are pivotal in the fight over whether to spend more on a stimulus. Baker predicted that Obama will get about $30 billion to $40 billion for aid to state and local governments -- well shy of the $180 billion their budgets are short -- and maybe half the money he wants to spend on new infrastructure projects. On the other hand, David M. Smith, associate professor of economics at Pepperdine University, said the administration should be careful about ordering up more stimulus when much of the first bill is still unspent, because its effect on the economy hasn't yet been felt. Too much stimulus could end up causing inflation and increasing the nation's debt, Smith said. This is something that I have touched on previously and I am not an economists, just someone who studies the economy, politics and life like the student we all should be, meaning striving to obtain knowledge about what we don’t know.

To be fair, another set of job creation figures will come out at the end of this month from the Recovery Accountability and Transparency Board, the independent agency that is overseeing the stimulus funds. Romer's CEA numbers look at the impact from tax cuts, aid to state and local governments, and infrastructure programs. But the recovery figures include only jobs created or saved by contracts, grants and loans -- which amounts to only about one-third of the stimulus package. The administration estimated that about 640,000 jobs were created or saved in the third quarter by those infrastructure projects. But after complaints about how those numbers were figured, the administration quietly changed the system. In reports from recipients of the money, the job figures now will apply to any position paid for with stimulus money, even if the job was not new or in danger of being cut without the stimulus funding.

Thus critics aren't happy with the new accounting, and Issa called it moving the goal posts. "Their new definition is, 'If we spend taxpayer money, we're successful,' " he said. Recently a study done by The Associated Press looked at local unemployment figures across the country and found little impact from the stimulus spending. But Baker said that's because the infrastructure-spending portion of the stimulus is too small a percentage of the entire economy to make a dent in the employment rate. The number of jobs will continue to fall for a few more months, Baker predicted. And when things get better, discouraged workers -- who don't count as unemployed because they aren't looking for jobs -- will come back, which is a part of the 20 percent unofficial unemployed numbers. So they will keep the employment numbers depressed for a while as they are added back into the total of job seekers.

Even when the nation isn't losing jobs, Baker pointed out, the country needs to add 125,000 jobs each month just to keep up with the number of new workers in a growing population. Although Romer said she still thinks it is possible for last year's stimulus bill to add up to 3.5 million jobs, many economists say that may be overly optimistic. "I don't think it's a nutty number. Maybe it will be 3 million after two years," said Baker. The money for infrastructure programs has gone out much more slowly than aid for extra unemployment benefits and tax credits, which don't have as big an impact on jobs, Romer said. Direct spending on projects has a "bigger bang" because construction workers buy cars and restaurant meals and other items that create yet more jobs, she said. Economists say it's impossible to know the exact number of jobs created or saved by the stimulus bill because they don't have a way to measure what would have happened if it hadn't passed.

At the end of the day, it doesn’t matter which said of the job debate you on or if you are a Democrat or a Republican, what matters right now is that we create jobs. Living in hypothetical’s will not create jobs and debating whether or not the stimulus package saved or created 2 million jobs last year as the administration and some in Congress what us to believe or not believe will not help. The fact is that things could be worse without the stimulus package but it can also be better if the stimulus package was structured and targeted better. Thus right now it is time out for politicians to stop playing politics with job creation. Instead they need to really focus on what will work and what will give the American people a better bang for taxpayer dollars in creating jobs rather than wasting it on projects that are wasting our tax dollars.