Is it math or politics? Counting the cost of stimulus jobs

By Christine Romans

There is nothing more political, and fuzzy, than the math surrounding the massive $787 billion stimulus package. The administration says 640,000 jobs have been saved or created by the stimulus. That's based on $159 billion in contracts to states for roadwork, bridges, and to keep teachers in the classroom.

Using very simple math, that means taxpayers have spent about $248 thousand per job the White House says were saved or created.

$159,000,000,000 spending ÷ 640,329 jobs saved/created = $248,309 per job

Critics of the stimulus will say it shows taxpayers are getting a raw deal.

But like everything surrounding this stimulus, it is not as simple as that. And a White House economist told ABC such math is quote "calculator abuse."

Why? These are just jobs created to date. These projects will keep creating more jobs, so this cost per job number will only go down over time. The money obviously is not simply down the drain – it's creating economic activity and reflects wages, but also, supplies that are ordered, and materials manufactured, equipment rental, etc.

Still, there is an obsession with quantifying the cost to taxpayers of these jobs.

The White House has its own formula for that.

Government spending $92,136 per job-year
Tax cuts $145,351 per job-year
State fiscal relief $116,603 per job-year
Source: White House

Once the stimulus is fully deployed and working, taxpayers will have spent $92,000 per job.

You can read more of the White House Council of Economic Advisers’ math here.

All the subsequent job and cost counting is as much politics as mathematics. Supporters of the stimulus want to highlight new and saved jobs. They will say the economy is now growing again because of the stimulus spending. Opponents will say it costs too much, there is too much waste, and our grandchildren will pay for it later.

We may never know exactly how many jobs have been created or how long they will last. We will never have a list of three to four million American names who have benefited from the stimulus. But what is certain? I can tell you that $787 billion will be spent over the next two years, and political bickering over its effectiveness has just begun.