By Mosi Secret
In President Barack Obama’s news conference on Wednesday night, he said the $787 billion economic stimulus bill has already created or saved over 150,000 jobs. We decided to find out how the president arrived at that figure.
The simple answer: guesswork.
It turns out the feds don’t have a way to measure exactly how many jobs have been created or saved, so they use projections instead, and it’s all rather academic.
The new estimate, like the original one predicting the stimulus bill would save or create 3 to 4 million jobs, came from the Council of Economic Advisers. To get the number Obama used, economists at the council simply prorated their earlier estimates based on stimulus outlays as of April 21.
As we’ve reported before, the administration’s estimates are based on a guess at how much tax cuts and government spending will make the economy grow.
We asked Nigel Gault, an economist with the forecasting firm IHS Global Insight, about what he made of the administration’s latest assumptions.
“The only thing they have to go on is how much money has been actually spent,” Gault said. But that doesn’t tell the whole story. The feds count the money that goes out the door. They don’t have close tabs on what happens after that, he said.
“You have to ask, ‘Has the money been effectively spent? Has it actually been spent in purchasing goods and services or whatever it was supposed to be purchasing?’” Gault said.