Is the Stimulus Finally Working?

Personally, I don’t think so.  The joblessness rate is still over 9%, and those “shovel-ready” jobs weren’t as finally recognized by Mr. Obummer.  And then I ran across this over at Reason.com:

Still, more than 7 million jobs have disappeared from the economy since Barack Obama took office. He will be only the second president since Herbert Hoover to face re-election with fewer people working than when he started. (George W. Bush was the other.) So it seems fair to ask whether stimulus projects have increased the net number of jobs in the United States—or whether they simply have moved a diminishing number of jobs around.

Analogy time. Consider a robber who steals a purse containing $500, who then uses the money to buy himself a new TV. It is categorically undeniable that the theft has created a sale for the TV store. Conservatives who pretend the stimulus has not created any jobs whatsoever stand in the position of an observer trying to deny the TV has been sold.

Yet the liberal analysis lacks any recognition that the purse owner now has $500 less to spend on the laptop computer she was going to buy. The theft has generated one sale only by destroying another.

The first effect is easily seen. The second is not. But only the economically illiterate would conclude that just the first effect occurred, and that therefore the way to increase consumption is to encourage more purse-stealing. So in addition to looking at the number of jobs created or saved by the stimulus, shouldn’t we also consider the number of jobs destroyed or forestalled?

Who’s the thief in the night stealing our purses?  I’ll give you one guess…

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About Tom Roland

EE for 25 Years, Two Patents - now a certified PMP. Married twice, burned once. One son with Asperger's Syndrome. Two cats. Conservative leaning to the Right. NRA Life Member.
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One Response to Is the Stimulus Finally Working?

  1. The Griper says:

    tom,
    in your analogy you are forgetting a few facts necessary. the thief has expenses associated with that theft thus he will spend less for that tv while there would not be any additional costs for the purse owner in her purchase. in other words that thief may only spend $400 while the purse owner spends $500.

    we must also consider that the thief will spend that money on some illegal activity that isn’t considered as being a part of the economy while the purse owner will spend that money on legal activities.

    in other words when we talk about government stimulus we must see it as the government taking more out of the economy that it is putting back into it.

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