CBO: Our "Stimulus" Jobs Estimates Are Useless
Useless
From Tim Andrews
Monday, March 29, 2010 10:00 AM
http://www.atr.org/cbo-stimulus-jobs-estimates-useless-a4716#
Just in case there was anyone left living that still believed the Administration's claims of jobs
"saved or created" by the so-called "stimulus" (perhaps a hermit living out in the wilderness who has
had no access to any media for the last year or so, or hasn't read the great work put out by the
Center for Fiscal Accountability), the Congressional Budget Office admitted earlier this month that
it's calculations were, well, useless. As in totally, absolutely, utterly, useless. As Peter Sudermen
reports (emphasis ours):
The CBO doesn't actually count jobs created. Instead, it uses models that assume that putting
taxpayer money into the system results in additional demand, additional spending, and, consequently,
additional jobs. Before the stimulus passed, it used these models to predict that the stimulus would
create jobs. And now, in analyzing its effects, it's using those same models to estimate that it has
created jobs. But because the CBO relies on slightly updated versions of the same, original models
throughout the process, it wouldn't necessarily detect the fact that the stimulus didn't work if that
were the case.
The CBO, to its credit, has been fairly forthcoming about its methods and their limitations. In
response to a question at a speech earlier this month, CBO director Doug Elmendorf laid out the CBO's
methodology pretty clearly, describing the his office's frequent, legally-required stimulus reports as
"repeating the same exercises we [aleady] did rather than an independent check on it." CBO tweaks its
models on the input side, he says—adjusting, for example, how much money the government has spent. But
the results the CBO reports—like the job creation figures—are simply a function of the inputs it
records, not real-world counts.
Following up, the questioner asks for clarification: "If the stimulus bill did not do what it was
originally forecast to do, then that would not have been detected by the subsequent analysis, right?"
Elmendorf's response? "That's right. That's right."
Garbage in, garbage out.