NCPA - National Center for Policy Analysis


May 11, 2010

The White House may tout Congressional Budget Office (CBO) reports showing their $862 billion stimulus created jobs, but the CBO has also admitted their computer simulation did not take any actual new real world data into account, says Conn Carroll, the assistant director for the Heritage Foundation's Strategic Communications. 

To the contrary, an independent study of real world stimulus facts found: 

  • No statistical correlation between unemployment and how the $862 billion was spent.
  • That Democratic districts received one-and-a-half times as many awards as Republican ones.
  • An average cost of $286,000 was awarded per job created.  

And what kind of jobs were created, asks Carroll.  According to Gallup the federal government is hiring at a significantly faster pace than the private sector.  And data from the U.S. Bureau of Labor Statistics (BLS) confirms that governments are increasing public sector pay at far faster rates than the private sector.   None of this should be a surprise. President Obama specifically designed his stimulus to preserve government union jobs. 

What happens when big government and the big businesses best capitalized to influence it are the main drivers of economic recovery?  The recovery is slower and smaller than it otherwise would have been, says Carroll: 

  • A recent study by the Kaufman Foundation found that small businesses have led America out of its last seven recessions, generating about two of every three new jobs during a recovery.
  • But under this Obama recovery, not only are government jobs growing faster than private sector jobs, but jobs are rebounding faster at large employers than small businesses. 

There are far more types of small businesses engaged in more kinds of economic activity than Congress can devise special policy to help.  This sort of one-off, micro managing, tinkering policy may gain a headline and support, but it will not help small businesses broadly.  The more Washington taxes and regulates, the harder it is for small businesses to innovate and force big businesses to be more productive and create new jobs.  The more the Obama agenda is implemented, the slower our recovery will be, says Carroll. 

Source: Conn Carroll, "A Recovery Only Washington Could Love," Heritage Foundation, May 7, 2010. 

For text: 


Browse more articles on Economic Issues