This chart of job losses by state was put out by the republicans on the House ways and means committee. Congrats to North Dakota, the only state to add jobs since the stimulus billed passed. So what happened to those 3.5 million new jobs the Obama administration promised would materialize if we borrowed and spent 787 billion dollars? Veronique de Rugy explains on reason.com:
"Since then, Romer has told CNBC she couldn’t say for sure how many jobs would be created, since we can’t know what would have happened without the stimulus. But didn’t her report pro-ject what would happen if the stimulus wasn’t passed? Wasn’t the 3.5 million number supposed to be the difference between employment with the stimulus and employment without it?
The confusion flows from the faulty theory underlying the stimulus bill. In Keynesian thought, a decline in demand causes a decline in spending; since one person’s spending is someone else’s income, a fall in demand makes a nation poorer. As a poorer nation cuts back on spending, it sets off another wave of declining income. So any big shock to consumer spending or business confidence can set off waves of job losses and layoffs, as fewer goods are demanded and more workers become useless.
Under this logic, one possible remedy is for public spending to take the place of private spending. As government increases its spending, the money creates new employment. That, in turn, spurs those new workers to consume more and prompts businesses to buy more machines and equipment to meet the government-induced demand. Economists call this increase in aggregate income the “multiplier” effect. One dollar of government spending, the theory goes, ends up creating more than a dollar of new income. It’s a rare free lunch.
As appealing as the Keynesian story sounds, many economists have long doubted it. In 1991, looking across 100 countries, Robert Barro of Harvard presented historical evidence that high government spending actually hurts economies in the long run by crowding out private spending and shifting resources to the uses preferred by politicians rather than consumers. For a dollar of government spending, we end up seeing less than a dollar of growth. Can long-term poison be short-term medicine?".
If you don't want to take the republicans' numbers as proof of the stimulus bills failure to stimulate job creation. I offer the governments' website http://www.recovery.gov/. According to the Obama administration, stimulus spending in Massachusetts has created 584 jobs while spending $47,620,000. That's $81,541 per job.
To check out the job loss numbers on the above chart just click to enlarge.
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