Yesterday, the first batch of recipient reports were uploaded to Recovery.gov, and media headlines are now saying that the $16 billion so far tallied (more data is to be uploaded by the end of the month) created more than 30,000 jobs.
Exactly what the White House wanted – having the media report about jobs "created" when a good number of these jobs previously existed, and we have discussed the challenges associated with the cleverly devised but misleading "jobs saved"-metric before.
But the Administration thinks we shouldn’t get hung up on these definitions. In fact, agency memos outlining how recipients were supposed to be tallying the jobs for the reports they had to submit specifically say:
Disregard the distinction between „createdâ€Ÿ and „retainedâ€Ÿ. Simply count all employees paid for with Recovery Act funds.
And here’s where the big problem comes in: In Indiana, for example, according to the Indy Star, state officials sent in a report to the federal government that stated they had supported 16,000 jobs with "stimulus" funds. (Mind you that only 327 jobs currently show for Indiana on recovery.gov as the data shown at this point only reflects federal contractors not the money passed through state governments). The 16,000 jobs number the state has reported to the federal government is based on the $2.3 billion expected to pass through Indiana’s government. But here’s the problem:
A large majority of those calculated jobs — 13,232 — were tied to $610 million in so-called "fiscal stabilization funds" sent to Indiana to help support its state budget. Daniels chose to use that money as a substitute for a regular appropriation to K-12 schools, freeing up existing state funds to maintain Indiana’s budget surplus.
As a result, under the federal calculations, those 13,000-plus teaching and school staff jobs supported by that funding were included in the state’s report.
So more than 13,000 jobs of the 16,000 the state reported to the federal government under the "saved/created" category already existed. The Democrat House Speaker of Indiana complained:
"These jobs already existed, and they wouldn’t have cut 13,000 jobs without this money."
And Governor Mitch Daniels said:
"I personally wouldn’t try to tell a taxpayer this had any effect that I can see on the economy," Daniels said, "or let alone that there is some specific number of jobs attached to it."
Expect this issue of jobs being over-counted to be multiplied fifty-fold, because the problem will exist in every state. And so the fuzzy math continues.
Then, of course, there’s another issue: If we were to take the current numbers at face value, and iIf my math is correct, looking at the 30,000 jobs number based on the $16 billion distributed, then that would be jobs at an individual price tag of over $500,000 – quite a bargain, right?