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Top of the morning

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An Associated Press story about the failure of the stimulus package to create jobs is everywhere, including the front page of the News & Observer this morning, which has the folks on Right Wing Avenue beside themselves with glee.

Here is the sub headline above the N&O story.

 Infrastructure projects in first stimulus failed to budge jobless rate. But Obama wants more of them.

 The lead is even worse.

A federal spending surge of more than $20 billion for roads and bridges in President Barack Obama’s first stimulus has had no effect on local unemployment rates, raising questions about his argument for billions more to address an “urgent need to accelerate job growth.”

The question actually raised is why AP is misleading everybody. As economist Dean Baker points out, the highway spending in the stimulus plan in 2009 and its multiplier effect amounts to .2 percent of GDP. 

If its effect on employment was comparable to its impact on GDP, we would expect that a county with the average spending would see its employment rate increase by 0.2 percent or approximately 0.12 percentage points of the civilian population. There would be a comparable decline in its unemployment rate. This would be undetectable in any measure of county level unemployment, since random sources of fluctuation would dwarf this change, making it undetectable.

Baker also notes that some counties that received the money in 2009 have not yet spent it, which doesn’t appear to be factored into the report either.

Thank you Fox News AP.

5 Comments


  1. […] why would the county be dreading a 2012 reval, since the federal stimulus surely will have worked its magic by […]

  2. Jeff

    January 12, 2010 at 12:25 pm

  3. Charles Malone

    January 12, 2010 at 10:51 pm

    The GOP’s use of the facts regarding stimulus spending reminds me of how a drunkard uses a lamppost, more for support than illumination.

    Thanks for sharing.

  4. Steve

    January 13, 2010 at 2:51 pm

    Presumably AP believes these roads built themselves.

  5. IBXer

    January 14, 2010 at 12:32 pm

    The problem is the stimulus is nothing more than redistribution. It is no different than someone filling up a bucket of water at one end of the pool and emptying it into the other end of the same pool… except for the amount that is spilled on the ground during transport (administrative costs).

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