Measuring Job Growth

by Pejman Yousefzadeh on March 26, 2009

The Obama Administration likes to make grandiose claims concerning the number of jobs it expects will be created thanks to its stimulus plan. The problem, however, is that the Administration regularly ignores the amount of uncertainty that exists in the debate over job growth:

If space exploration were conducted like the job forecasts under the government’s new stimulus law, man surely would have missed the moon. But this isn’t rocket science.

No promise from President Barack Obama is more important to the wounded economy than his vow to save or create some 3.5 million jobs in two years. In support of that bottom line, the government even tells states how many jobs they can expect to see from the spending and tax cuts.

But precise trajectories are impossible to plot and even approximations can be wildly off, as the authors of these forecasts acknowledge, usually more readily than the policymakers who use them to promote the plan.

Flip through the stacks of economic analyses underpinning the stimulus plan and you find a lot of throat-clearing qualifications and angst:

_”Very uncertain.”

_”Difficult to distinguish among alternative estimates.”

_”We confess to considerable uncertainty.”

_”Subject to substantial margins of error.”

In other words, who really knows?

Who indeed? And shouldn’t more voice have been given to this degree of doubt while we were debating the stimulus plan?

After all, I’d hate to think that we spent nearly $800 billion for nothing, despite the fact that we had all the warning in the world that our $800 billion might not buy us all that much job growth, merely because the Obama Administration decided to ignore the many economists who pointed out that little may come from our efforts.

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