CBO: Obama Stimulus Package Added 3.3 Million Jobs

[Frodo]

Again, buttressing the argument that we would have been better off if it had been bigger:

CBO: Stimulus added up to 3.3M jobs

By JOSH BOAK | 11/22/11 4:12 PM EST

The economy would have been in much worse shape without the 2009 stimulus — which increased employment in the third quarter of this year by as many as 3.3 million full-time jobs, according to a report by the Congressional Budget Office.

Republican lawmakers and presidential candidates have blasted the $800 billion pumped into the economy through the American Recovery and Reinvestment Act as a waste of taxpayer dollars that failed to put people back to work.

The nonpartisan CBO figures offer a more nuanced picture of how government spending impacted an economy still coping with unemployment above 9 percent. It provides an alternative glimpse of an economy with even higher unemployment and drastically lower growth.

The CBO figures released Tuesday estimate that the stimulus package raised the gross domestic product this past quarter by 0.3 percent-1.9 percent.
----------------------------------------------------------------------------

Read more: http://www.politico.com/news/stories/1111/68965.html#ixzz1eTys95S2

[Wonkish1]

Sure it did!

[All Along The Watchtower]

Sure it did!

Glad you have seen the light.

[Marokai Backbeat]

Sure it did!

Love that this is the attitude you people have toward the CBO; essentially our real-world version of Atlasia's "Game Moderator." You cannot dismiss reality when it doesn't suit you.

No wonder some of you want to abolish it.

[Wonkish1]

Sure it did!

Love that this is the attitude you people have toward the CBO; essentially our real-world version of Atlasia's "Game Moderator." You cannot dismiss reality when it doesn't suit you.

No wonder some of you want to abolish it.

Well first of all since the CBO doesn't acknowledge the existence of the bond market in this analysis than yeah than their number isn't worth the paper its printed on.

[Marokai Backbeat]

Mmhm.

[Link]

Sure it did!

Love that this is the attitude you people have toward the CBO; essentially our real-world version of Atlasia's "Game Moderator." You cannot dismiss reality when it doesn't suit you.

No wonder some of you want to abolish it.

Well first of all since the CBO doesn't acknowledge the existence of the bond market in this analysis than yeahthan  their number isn't worth the paper its printed on.

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

[Wonkish1]

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

[Link]

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

I just don't understand how the current activities in the bond market post stimulus invalidate the CBOs numbers.

[Marokai Backbeat]

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

I just don't understand how the current activities in the bond market post stimulus invalidate the CBOs numbers.

It has nothing to do with it. Just let him be.

[True Federalist (진정한 연방 주의자)]

Even taking the CBO numbers as gospel, that's over $240,000 per job!  Not exactly a number to be crowing about.

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

I just don't understand how the current activities in the bond market post stimulus invalidate the CBOs numbers.

What he is saying is that if the money used to buy $800 billion of treasuries had been used for other purposes, it would have created jobs as well.  And considering that the CBO numbers have each of those stimulus provided jobs costing so much I find it hard to believe it couldn't have done as good a job at creating jobs elsewhere.

[Wonkish1]

I just don't understand how the current activities in the bond market post stimulus invalidate the CBOs numbers.

Because you like most people(including many people who even work in finance) don't understand how money flows through capital markets and the importance of the marginal dollar in markets. If your genuinely curious I'll explain it to you, but if its just something your not going to take seriously then its probably not worth the time to explain.

And we're talking about immediately prior to stimulus spending, during, and after not just post stimulus.

[Wonkish1]

It has nothing to do with it. Just let him be.

It has everything to do with it. Again I work in Finance I get this stuff much better than other folks on here. So this is quite easy for me to explain. The problem is that most people on here will just have there eyes glaze over and just go on preferring to be ignorant to something like this.

[Snowstalker Mk. II]

Still should have been bigger.

[Beet]

Even taking the CBO numbers as gospel, that's over $240,000 per job!  Not exactly a number to be crowing about.

Why not? That's a lot of money. It's about the amount that I have earned since I started my own job (unrelated to the stimulus, as far as I know), but I hope that my current position will earn me quite a bit deal more, eventually. I'm aware too of course, that the existence of my position has cost my employer a lot more than what I have taken home; as it has to pay for my health insurance, office space, computer, utilities usage, they have bought me a laptop, and have reimbursed other capital expenses. And I'm aware, also that the project that I am on with several other people has required hundreds of thousands of dollars in invested capital in terms of infrastructure, but this cost would be spread across several jobs. In any case, I am aware finally that my employer could have, instead of hiring me to do productive work, thrown much less money and capital at my project, and hired double or triple the number of people to stand around and shovel dirt from one hole to another, then from the destination hole back to the original. Of course, it wouldn't be very productive and would be less desirable than straight out welfare, but it would certainly have padded the dollars-to-jobs figures, were that the main goal.

You must be logged in to read this quote.

That assumes that it would have been used for other purposes to begin with (and not things like stock buybacks or creating jobs overseas; the entire premise of Keynesian economics is that slack exists.

[Wonkish1]

Even taking the CBO numbers as gospel, that's over $240,000 per job!  Not exactly a number to be crowing about.

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

I just don't understand how the current activities in the bond market post stimulus invalidate the CBOs numbers.

What he is saying is that if the money used to buy $800 billion of treasuries had been used for other purposes, it would have created jobs as well.  And considering that the CBO numbers have each of those stimulus provided jobs costing so much I find it hard to believe it couldn't have done as good a job at creating jobs elsewhere.

Nailed it. But I'm more than willing to go through this from a capital flow perspective and show indisputably that this has to be the case.

Interest rates aka the price of money has absolutely zero to do with understanding this issue. All the interest rate shows is the risk free rate + duration + default risk. The price of money doesn't change the available capital for particular capital expenditures. It just shows the demand for one fixed income asset class vs. another.

[Wonkish1]

Even taking the CBO numbers as gospel, that's over $240,000 per job!  Not exactly a number to be crowing about.

Why not? That's a lot of money. It's about the amount that I have earned since I started my own job (unrelated to the stimulus, as far as I know), but I hope that my current position will earn me quite a bit deal more, eventually. I'm aware too of course, that the existence of my position has cost my employer a lot more than what I have taken home; as it has to pay for my health insurance, office space, computer, utilities usage, they have bought me a laptop, and have reimbursed other capital expenses. And I'm aware, also that the project that I am on with several other people has required hundreds of thousands of dollars in invested capital in terms of infrastructure, but this cost would be spread across several jobs. In any case, I am aware finally that my employer could have, instead of hiring me to do productive work, thrown much less money and capital at my project, and hired double or triple the number of people to stand around and shovel dirt from one hole to another, then from the destination hole back to the original. Of course, it wouldn't be very productive and would be less desirable than straight out welfare, but it would certainly have padded the dollars-to-jobs figures, were that the main goal.

The problem is that isn't the amount that is actually making its way to the "new hires or saved hires" which is substantially lower.

And if that shoveling dirt from one hole to another came at the expense of another job that increased economic output and GDP to allow for more jobs to be created you still think it would be a productive action?

Maybe the government should then just hire people to dig with spoons, it will get more people hired to do that work if you believe that?

[Wonkish1]

That assumes that it would have been used for other purposes to begin with (and not things like stock buybacks or creating jobs overseas; the entire premise of Keynesian economics is that slack exists.

Yeah and this is why I'm willing to go through capital flow and the concept of the marginal dollar to show you that slack doesn't exist.

[Wonkish1]

I just don't understand how the current activities in the bond market post stimulus invalidate the CBOs numbers.

Because you like most people(including many people who even work in finance) don't understand how money flows through capital markets and the importance of the marginal dollar in markets. If your genuinely curious I'll explain it to you, but if its just something your not going to take seriously then its probably not worth the time to explain.

And we're talking about immediately prior to stimulus spending, during, and after not just post stimulus.

^^^So Link, I'm prepared to spend the time to go through what will probably be the next great subject of economic study, the study of capital flows through an economy for you if you want it. I promise to make it as interesting and informative as I can. But I would actually like to hear that you actually would be interested and inquisitive about it first not just skim it and overtly hostile.

Its up to you. And I'm only asking because it seems me and you are starting to get along a little better these days.

[Ban my account ffs!]

After the stimulus the appetite for US government debt increased and our borrowing costs dropped to an all time low.  How would you like the CBO to adjust its numbers?

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

You spend so much time moving the goalposts, it's a wonder you ever have time to play!

[Wonkish1]

Of course there is high appetite for treasuries they are seen as not having a default risk. That has no bearing on the criticism I just made.

People that buy treasuries would have bought some other asset if the supply wasn't increased so much. The CBO doesn't acknowledge that this most basic fact is true.

You spend so much time moving the goalposts, it's a wonder you ever have time to play!

Moving the goalposts? What are you talking about? I'm very clear here. Capital is limited. Investment assets cost money. Among them are treasuries. Interest rates are a tiny portion of the cost of those assets. Buying investment assets uses up capital. At no point throughout this am I "moving the goalposts". I'm very specific and I know exactly what I'm pointing to. You don't.

[cinyc]

Sure it did!

The report doesn't say that it created 3.3 million jobs - but 0.5 million TO 3.3 million full time equivalents, which includes overtime for those already in jobs.  That's actually a downward revision from the CBO's August report.  The actual range of the increase in the number of people employed due to the stimulus is 0.4 million to 2.4 million - again, a pretty broad range that allows partisans to argue whatever suits their agenda.

And the CBO pointed out the same thing you did - over the long term, the stimulus will cause the economy to shrink by up to 0.2% after 2016 due to crowding out.

[Beet]

And the CBO pointed out the same thing you did - over the long term, the stimulus will cause the economy to shrink by up to 0.2% after 2016 due to crowding out.

Well it says that it will decrease output by "between zero and 0.2%" after 2016, however they say that this estimate doesn't account for improvements in labor force participation, employment, and productivity as a result of more people working, and working more hours, in 2009-2011 which would have positive effects after 2016.

[Wonkish1]

Sure it did!

The report doesn't say that it created 3.3 million jobs - but 0.5 million TO 3.3 million full time equivalents, which includes overtime for those already in jobs.  That's actually a downward revision from the CBO's August report.  The actual range of the increase in the number of people employed due to the stimulus is 0.4 million to 2.4 million - again, a pretty broad range that allows partisans to argue whatever suits their agenda.

And the CBO pointed out the same thing you did - over the long term, the stimulus will cause the economy to shrink by up to 0.2% after 2016 due to crowding out.

That is just the acknowledgement of the standard Keynesian position that excess future debt is a negative impact. It doesn't establish where the money comes from today and what would have happened to that money had not as much treasuries been issued. So they look at the future debt service, but they don't look at current capital flows.

You might as well just believe the money comes out of thin air disavow existence of the bond markets because that is the assumption they are using for the analysis today.

[CARLHAYDEN]

Again, buttressing the argument that we would have been better off if it had been bigger:

CBO: Stimulus added up to 3.3M jobs

By JOSH BOAK | 11/22/11 4:12 PM EST

The economy would have been in much worse shape without the 2009 stimulus — which increased employment in the third quarter of this year by as many as 3.3 million full-time jobs, according to a report by the Congressional Budget Office.

Republican lawmakers and presidential candidates have blasted the $800 billion pumped into the economy through the American Recovery and Reinvestment Act as a waste of taxpayer dollars that failed to put people back to work.

The nonpartisan CBO figures offer a more nuanced picture of how government spending impacted an economy still coping with unemployment above 9 percent. It provides an alternative glimpse of an economy with even higher unemployment and drastically lower growth.

The CBO figures released Tuesday estimate that the stimulus package raised the gross domestic product this past quarter by 0.3 percent-1.9 percent.
----------------------------------------------------------------------------

Read more: http://www.politico.com/news/stories/1111/68965.html#ixzz1eTys95S2

Uh, Frodo, you should lookfor a  reliable source.  Politico is veering further and further to the left (and ergo further and further from reality).

CBO: Stimulus hurts economy in the long run
By Stephen Dinan
The Washington Times
Tuesday, November 22, 2011

The Congressional Budget Office on Tuesday downgraded its estimate of the benefits of President Obama’s 2009 stimulus package, saying it may have sustained as few as 700,000 jobs at its peak last year and that over the long run it will actually be a net drag on the economy.

By Stephen Dinan-The Washington TimesTuesday, November 22, 2011