Missing The Story On 2.5 Million Jobs
By INVESTOR'S BUSINESS DAILY | Posted Monday, November 24, 2008 4:20 PM PT
Stimulus: Media are fawning over Obama's plan to create 2.5 million jobs in two years. But as usual on Democratic proposals, they aren't doing their homework. By historical standards, Obama's goal is quite modest.
The president-elect has directed his economic team "to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011." And right on cue, the media have described the plan in glowing terms.
The Washington Post called the goal "more expansive than anything proposed so far." Reuters described it as "bold" and "aggressive," and NPR called it "an ambitious economic stimulus package." "Obama pumps up his economic stimulus proposal" was the headline over the Los Angeles Times story.
Obama hasn't released any details about the plan, other than to say it will be "a two-year, nationwide effort to jump-start job creation in America," and that it will be "big enough to meet the challenges we face."
Such promises are easy for politicians to make because a growing economy creates enormous numbers of new jobs, no matter who sits in the White House.
Since Eisenhower's first term, the economy has created an average of 1.5 million new jobs each year. Since Reagan's first term, the average has been about 2.5 million a year. And Reagan, who inherited an economy as bad if not worse than the current one, saw 6.3 million new jobs created four years after he entered the White House.
If Obama just manages to hit the post-World War II average, there would be 3 million more jobs by 2011.
What's more, Obama's promise doesn't keep pace with projected growth in the labor force. The BLS projects that roughly 2.6 million new workers will enter the labor pool over the next two years.
If that's the case, Obama's plan would leave the unemployment rate slightly higher in 2011 than it is now. Moreover, Obama's stimulus plan could eventually total $700 billion, the Washington Post reports. So, as former Council of Economic Advisers chief Gregory Mankiw notes, each job Obama "creates" will cost $280,000.
Full editorial here.
1 comment:
Energy Independence needs to be included in the realm of our serious economic issues. We mustn't let this temporary lull in oil prices make us complacent in our efforts to become energy independent. Our dependence on foreign oil impacts every aspect of our society and economy. This past year our wallets were emptied by high prices at the pump. The cost of food and every consumer product has risen because of increased production and shipping costs. The average family had no money left over to spend, save or invest. So we tighten our belts, we spend less because we have less and sadly that results in more job losses. We have so much available in the way of FREE energy, solar and wind that can be utilized to replace oil. Hybrid and electric plug in cars would replace another huge percentage of our dependence on foreign oil. We spent 168 BILLION on a stimulus pkg that did nothing for our economy. Now there is talk of another stimulus pkg. Why not invest in initiating alternative energy sources and making hybrid and plug in car technology affordable for the average Joe. It cost the equivalent of 60 cents a gal of gas to drive an elec car. We have the knowledge and the technology, what we seem to lack as a nation is a PLAN. Jeff Wilson has a great new book out called The Manhattan Project of 2009 Energy Independence NOW. I highly recommend this book to anyone who is worried about our economy and interested in seeing our country become energy independent!
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