| July 8, 2011

Insulting our intelligence

Last week President Obama’s Council of Economic Advisers (CEA) released its seventh quarterly report on the economic impact of the American Recovery and Reinvestment Act (ARRA) of 2009. Since the advisers on the council are selected by President Obama, it’s no surprise the 13-page “tap dance” report concludes thusly: “The analysis indicates that the Recovery Act has played a significant role in the turnaround of the economy that has occurred over the past two years.”

The report uses illogical, mind-numbing, and confusing gyrations to arrive at this conclusion, and source information for key assumptions or key estimates in the report is omitted. Thankfully, one needs only to review a couple of statistics in the report to see such a conclusion is intentionally dishonest and an insult to taxpayers’ intelligence.

On page 4 of the report we find total spending to date by the stimulus is $666.3 billion, and on the last page of the report the conclusion states, “As of the first quarter of 2011, the report estimates that the Recovery Act raised employment by 2.4 to 3.6 million jobs relative to what it otherwise would have been.” Unfortunately, the report does not provide any concrete numbers or estimates that can be analyzed on “what it otherwise would have been” -- that is to say, CEA simply tells us how many jobs would have been created without ARRA! So let’s assume that all of CEA’s projections and assumptions on “raised employment” are correct. ARRA increased the nation’s total debt by more than the size of the total defense budget for FY-2010, at a cost of $185,083 to $277,625 per “raised employment” job, according to CEA “estimates.”

So Mr. President and CEA, please stop insulting our intelligence. Please listen to the loud bipartisan chorus of experts and, more importantly, taxpayers who understand that the government borrowing or printing $185,083 to $277,625 per “raised employment” job will always be bad in the end for the taxpayers who must foot the bill.

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