Trillions for Nothing
Barack Obama claims his plan “will likely save or create three to four million jobs.” The House gave us a glimpse of what we’re in for last week with an $825 billion bill – page 3 of the bill states a goal “of using at least 50 percent of the funds for activities that can be intiated not later than 120 days after of the enactment of this Act “. This at least implies a desire to spend all of the money is one year – although the bill does allow for the spending of some of the monies into the later part of 2010.
If the number balloons to $1 trillion (not that unlikely as even the House’s top appropriator, David Obey (D-WI) feared that $825 billion was too low) then that’s a cost of $250,000 to $333,333 per job. The overall expenditure number doens’t include the $350 billion of TARP monies either, pushing the cost per job even higher.
At the end of the third quarter, US Gdp was $14.4 trillion and the number of people employed was 145 million – about $100,000 per job.
Other interesting comparisons: The Australian GDP is about $775 billion and supports 10.7 million jobs. The Canadian GDP is $1.2 trillion and supports a workforce of 17 million jobs. That about $72,000 per job in Australia and $70,000 in Canada. GDP per capita in both countries is much lower than that of the United States, which mostly accounts for the lower GDP per job ratio, but still should cause some pause.
For a more detailed breakdown refer to a post by my colleauge Jonathan Tollman.