Obama's Spending Plan: $250,000 Per Job
Senior Editor, CNBC.com
Barack Obama's jobs plan may be one of the worst policy proposals I've ever seen.
As I pointed out last week, the plan to "pay for" the jobs proposal with tax hikes is just lunacy. It eliminates every bit of stimulus effect that could possibly come from additional government spending.
Over at Zero Hedge, John Poehling has run the numbers on the American Jobs Act (AJA).
Even if you take very optimistic figures, the jobs bill turns out to be unbelievably costly.
For those eager to put some math to the rhetoric coming from the White House over the president's jobs creation plan, and that should be everyone, here is a quick and dirty estimate based on the numbers being thrown around of a 2 percent GDP increase in year 1 and 1.9 million jobs created or saved...most saved, as in those you can't really quantify. Said otherwise, roughly a $300 billion increase in GDP yields 1.9 million jobs. So far so good.
Now since the president is proposing to pay for the program over 10 years, let's assume the $475 billion in direct expenses is financed for 10 years at 2.5 percent which adds roughly $120 billion to the total cost of the program. In other words, as the calculations detailed and show below elaborate, the overall AJA plan will cost $250,000 per job created (excluding the interest expense) and $312,500 per union job created (including interest). And that's how much it costs for Obama to purchase one vote...created or saved. Keynesian efficiency strikes like a Swiss watch yet again.
So that's $250,000 per job, before interest expense.
Wouldn't it be better just to have a free national lottery and mail $200,000 checks to a lucky 1.9 million people?
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