CBO: Obama Stimulus Package Added 3.3 Million Jobs

[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.
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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

[CARLHAYDEN]

I've generally taken CBO estimates with a grain of salt.  Each side trots them out when it suits them and the numbers don't always hold up.  Not that the calculations are wrong or malicious or biased...just that $hit happens and modeling that stuff is inherently tricky.

That said...Sun Myung Moon's single ply is a reliable source but Politico is not...I guess reliable now means...agrees with ALLCAPSNAME, eh?

Well, let's take you assertions one at a time:

First, CBO estimates should be taken with a large bag, not a grain of salt.

Second, CBO numbers usually don't hold up.

Third, yes there is a bias in the CBO calculations.  If they were just random errors then their estimates would roughly fall equally high or low, which is NOT the case.

Fourth, yes I understand, you believe anything that Politico posts, but nothing published by a conservative publication (which you feel a compulsion to attack),

Fifth, the 'logic' of your attack on my posting is absolutely hillarious.  Is it a allergy on your part to CSPS?

Finally, another source for you to attack:
 
IBD Editorials

The CBO Quietly Downgrades Obama's $825 Bil Stimulus

Posted 11/23/2011

Recovery: After nearly all the stimulus money has been spent, the Congressional Budget Office now admits it cost more than advertised, did less to boost growth and will hurt the economy in the long run.

http://news.investors.com/ArticlePrint.aspx?id=592709&p=1

[CARLHAYDEN]

Bullmoose,

Let's look at the record.

CBO almost always projects a cost for a program of less than what ends up being the actual cost (check the record).

Now, there are a number of explanations for this phenomena:

First, that that CBO is frequently ordered to make assumptions which are incorrect and invalid.  

Second, frequently CBO's estimates are more accurate than those of the White House, so they look less absurd by comparison.

Third, the methodology used in cost estimates is fundamentally flawed in that if fails to adequately address long term factors for programs with a lifespan of more than a couple of years.

Finally, here is a url to just some of the underestimates:

http://www.cato.org/pubs/tbb/tbb-0309-17.pdf

[CARLHAYDEN]

Wonkish,

You put it very well.

The "static" nature of CBO "analysis" has been under attack by economists for several years.

CBO counters that it is impossible to accurately project such changes.

The bottom line is the CBO is consistently wrong!

[CARLHAYDEN]

Wonkish,

You put it very well.

The "static" nature of CBO "analysis" has been under attack by economists for several years.

CBO counters that it is impossible to accurately project such changes.

The bottom line is the CBO is consistently wrong!

And honestly, I'm not really disputing that the CBO is...well...wrong...frequently...even consistently if you like...and you spelled out pretty decent reasons why it often errs.  If asked why the CBO isn't accurate, I'd rattle off many, but perhaps not all, the aforementioned reasons.  That said, I wouldn't make the leap that what the CBO does (forecasting, whatever) is malicious, or fraudlent.  Just on many occasions wrong, and there is a difference.

Bullmoose,

I did not state that the CBO estimates/forecasting were "malicious," but rather that they consistently err in a direction that underestimated costs of programs and overestimated benefits.  Now, after many years of such wrong estimates/forecasting, a responsible agency would seek to correct its errors.  CBO refuses because it is used by politicians to sneak through their programs.

Now, if CBO were to overestimate the cost of projects roughly as often as it underestimates them, then the error would not be directional.

So, under the circumstances, yes, the estimates are fraudulent.

[CARLHAYDEN]

Wonkish,

You put it very well.

The "static" nature of CBO "analysis" has been under attack by economists for several years.

CBO counters that it is impossible to accurately project such changes.

The bottom line is the CBO is consistently wrong!

Fine its impossible to project such changes, but since its always the *exact* same direction then the least they could do is make some historical adjustment based on some average they've been off in the past.

My problem isn't in that they are consistently wrong(that's expected). Its that they are always way wrong in the same direction every time. And their excuse for that is that they just can't project how much of a behavior change will result so they're more content just being extremely off in the same direction every time. Its just dumb!

What CBO is doing with this argument of it being impossible to accurately predict changes in behavior, is engage in dissimulation.

What they don't argue is that methodologies in existence now to modify CBO's projections would be MORE accurate than their existing methodology.

To use an analogy:

Take a polling firm which insists only on using only "adult" samples in their surveys.  After many general elections, their results consistently predict a larger percentage of the vote for Democrat party candidates than is actually the case.

Now, other survey research firms which use Registered Voter or Likely Voter samples over the same period, and get more accurate results, and results which aren't consistently favorable to one party.

Are the Likely Voter polls always perfectly accurate?  Of course no!.  But they are almost always more accurate than the "adult" polls.

[CARLHAYDEN]

Wonkish,

You put it very well.

The "static" nature of CBO "analysis" has been under attack by economists for several years.

CBO counters that it is impossible to accurately project such changes.

The bottom line is the CBO is consistently wrong!

And honestly, I'm not really disputing that the CBO is...well...wrong...frequently...even consistently if you like...and you spelled out pretty decent reasons why it often errs.  If asked why the CBO isn't accurate, I'd rattle off many, but perhaps not all, the aforementioned reasons.  That said, I wouldn't make the leap that what the CBO does (forecasting, whatever) is malicious, or fraudulent.  Just on many occasions wrong, and there is a difference.

I wouldn't say its malicious. But they know their going to be off in the same direction every single time and they don't care. So call what you will, but its not accidental.

If they are consistently wrong in the same direction, then that makes their errors predictable and thus something that can be adjusted for because they are reproducible.  Conversely, if they keep adjusting their methodology in search of being more accurate, their estimates become less useful.

Which would you rather have, a clock that is consistently 15 minutes slow, or a clock that is always within 5 minutes of the correct time, but you can't be sure if it is fast or slow?

I will try to explain in a simple manner so that you might be able to understand.

While CBO is almost always wrong in the same direction (i.e. underestimating the cost of government programs), the degree of their of error varies wildly.  Sometimes CBO underestimates the cost by a few per cent (forgiveable), usually by quite a bit, and occasionally by massive margins.  So, to take your "clock" analogy, we know the clock is "slow" but we don't know whether its just a few minutes slow, or several hours slow.

The consistent thing about CBO estimates is the direction of their error, not the extent of their error.

Just as you are generally (make that almost always) arguing for more government and less freedom, the degree of suppression of freedom you advocate varies from time to time (maybe depending upon medication).

[CARLHAYDEN]

Oh, and just to be fair, let me note that the institutional bias of the CBO is paralleled by the White House and the Federal Reserve.

All three of those sources tend to have a truly strange belief that somehow the economy will get better if only the government intervenes more.

Remember how the Obama administration told us that the unemployment level (U-3) would not exceed 8 % if the porkulus bill was passed?