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Economists contacted by CRN, including former director of the Congressional Budget Office Douglas Holtz-Eakin, and Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University who testified before Congress on the effects of the stimulus, have questioned the overall job creation claims of the administration.
"It is hard to throw three-quarters of a trillion dollars at the economy and not have some impact, but we didn't get our money's worth," said Holtz-Eakin, who helped chart economic policies under President George W. Bush. "We could have done better. It could have been better designed. We are going to find out years from now about all the waste in it. We know it had more than stimulus as part of its design. There was a lot of Obama domestic policy agenda in there in disguise. That was really mixing purposes and undercut the efficiency. And we got as a result what we got, which is a substandard recovery."
The problem with forecasts from the Obama administration is the administration used an economic model that, in effect, predicted how many jobs would be created by the government spending and never seriously attempted to measure the actual job creation impact, said de Rugy.
"After the fact, they didn't try to go and measure to see what the economy had actually done compared to what they predicted the stimulus would accomplish," de Rugy said. "They just assumed what their model predicted actually happened. It would be exactly like the weatherman saying, 'Tomorrow it is going to be sunny with chances of rain in the afternoon. And then the next day, even if it has been raining all day, they said, 'Today it was sunny and it rained in the afternoon.'"
Several attempts by CRN to get comments from the White House were unsuccessful.
CRN has spent the past six months looking specifically at where the ARRA funds were spent on technology projects, trying to determine how many jobs were created. CRN also spoke with dozens of executives and examined government documents including Recovery Act reports from the General Accounting Office, Congressional Budget Office and the Executive Office of the Council of Economic Advisers. It was a difficult task given the arcane job-reporting requirements from the federal government that allowed recipients to double- and even triple-report jobs under a "Full Time Equivalent" (FTE) formula.
What's more, every one of the companies contacted by CRN refused to discuss job creation from the funds they received or the impact on the overall economy.
The five top companies profiled by CRN for this report received a total of $745.82 million in ARRA awards and slashed their U.S. workforces collectively by an estimated 50,000 employees. CRN reviewed select prime recipient awards totaling $122.29 million received by these top five companies and found they resulted in 709.5 jobs reported to the Recovery.gov website. That amounts to a cost of $172,489 per job.