Sizing Up The Stimulus: Where Are The Jobs?


CRN's investigation found a significant amount of funds were used for hardware, software and services that had little relative job impact. For example, systems integration giant Computer Sciences Corp. received $29.02 million to put in a "high performance compute system" at the National Oceanic and Atmospheric Administration Environmental Security Computer Center and reported a single job funded for each of the seven quarters of reporting, according to the Recovery.gov website.

One of the highly visible aspects of the stimulus was the broadband component, which some industry executives claimed could have a big job multiplier impact. But the University Corporation for Advanced Internet Development, also known as Internet2, a public/private partnership aimed at interconnecting more than 30 existing research and education networks, received $52.53 million in funds of a total of $117.61 million and reported only 19.25 jobs to Recovery.gov. That amounts to a whopping $2.72 million per job.

Those figures do not match the sanguine jobs outlook with regard to the stimulus spending from President Obama and members of his administration, who have remained consistent from the outset of the economic crisis. The president said before the legislation was passed that "most of the money that we're investing as part of this plan will get out the door immediately and go directly to job creation, generating or saving 3 [million] to 4 million new jobs."

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, stuck with the economic model regardless of unemployment data and never measured actual job creation, 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.' "

Even government insiders contacted by CRN admit that the full time equivalent job reporting requirements used by the government made it impossible to determine how many jobs ultimately were created by the stimulus. One government official, who defended the legislation as providing critical jobs growth when the country needed it most, conceded that ultimately the "unvarnished facts" needed to assess whether the government spent "tax dollars wisely" is nowhere to be found.

The Council of Economic Advisers itself warned about the problems with the reporting methodology in a May 2009 report: "There will likely be inconsistencies and measurement error across individual reports. This limitation is present whenever thousands of recipients with very different types of projects are asked to provide information. The problem is heightened by the fact that the funds will be allocated in a wide variety of formats."

"Because of these limitations, the reported job numbers will need to be used with caution and as part of a more complex estimation strategy," the report read.

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