Daily Wisdom

August 06, 2010

Stimulus Spending And Job Growth: Update 14

Well, it's that time again. Time to update Obama's stimulus-driven job creation results. Let's look at the latest picture. In July, there was a net loss of 131,000 jobs, but this job loss number was due in large part to the layoff of 143,000 temporary census workers. Again, since I did not include the temporary census workers in May's job increases, I cannot then include the losses here. Therefore, in the graph below, I have discounted the census job losses and allowed for a net gain of 12,000 jobs. The unemployment rate remained at 9.5%.

Barack Obama said his stimulus package would create approximately 4 million "new" jobs over two years. In order to create 4 million jobs in 24 months, the Obama administration would have had to create approximately 166,667 jobs per month to reach his target, assuming linear job growth. That scenario is shown as violet in the following graph.

I developed a curve showing what I thought might be a more "Likely" scenario -- plotted as light blue in the following graph. As you can see from the graph, the actual trend of job losses was somewhat worse than I had predicted -- plotted as yellow and red. However, the trend generally followed the trajectory I had originally envisioned until about May of this year (Month 15). Since then, job growth seems to have flat-lined.

I have revised the May and June job figures downwards according to the latest data from the US Dept of Labor. Now, instead of having to create 166,667 new jobs per month to reach his original target of 4 million new jobs, President Obama now needs to create 874,285 jobs per month -- in order to make up for the more than 2 million jobs that were lost since the stimulus bill was signed.

I am sorry to once again report that I was not one of those fortunate 12,000 who found work in July. It is now beginning to appear that not only has Obama's Stimulus Package failed, but that his policies are making things worse. The "Likely" scenario I projected was based on a natural economic recovery which should have occurred regardless of the stimulus. If the job numbers continue on their present slow growth trend (or get worse), then it can only suggest that Obama's policies are to blame.


At 8/06/2010 3:27 PM , Blogger Nylecoj said...

My Dad and I were discussing the job numbers today. We talked about the fact that the numbers also do not include those of us employed but not receiving income so that our employees can continue to work. I would have to lose at least 1.5 employees to make up for us. So I consider myself working my backside off but unemployed based on receiving income. I figure that if we are doing that we can't be the only ones. In that case the potential unemployment numbers are more astronomical than even the real ones.

At 8/06/2010 3:29 PM , Blogger Nylecoj said...

I am fortunately in a better place than you are because if there is a recovery I may be able to make up some of that income.
I certainly hope and pray that you find yourself in better circumstances soon.

At 8/06/2010 9:41 PM , Blogger Hawkeye® said...

Thanks for your prayers (they are always coveted). But don't worry about me too much. I'm fine for the time being. Between my unemployment check and a small pension, I'm making more than my wife who is working full time. I'm on COBRA, which, thanks to Obama (I hate to admit), is at a 65% discount. So, I'm only paying $400 per month for health insurance instead of $1200+. I'm not driving much, so I only fill the gas tank about once a month. Expenses are pretty low. And I've had plenty of time to fix up things around the house in case I get a new job and have to relocate.

I could be wrong, but I would be surprised if there were many people like you working for no income so their employees could stay on. Maybe some, but not many I think. God bless you for your kindness and thoughtfulness. Your reward will be great in heaven.

(:D) Best regards...

At 8/09/2010 1:22 AM , Blogger camojack said...

"If the job numbers continue on their present slow growth trend (or get worse), then it can only suggest that Obama's policies are to blame."

Ya think?!

At 8/09/2010 9:38 AM , Blogger Hawkeye® said...


(:D) Best regards...

At 8/09/2010 7:52 PM , Blogger Nylecoj said...

Thank you for the kind words. You may be right about the numbers being lower than I think. I will tell you that I don't recommend the practice.
My credit is gone to heck and luckily stuff has started to come in again so I can get my house (literally) back in order.


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