From John Goodman's Blog:
A lot of news outlets carried Mark Zandi’s prediction:
“The president’s plan would provide a meaningful boost to the economy and job market in 2012,” Zandi concluded. “I expect the plan to add 2 percentage points to real GDP growth and 1.9 million payroll jobs, and reduce unemployment by a percentage point.”
I entered these numbers into a spreadsheet along with the cost of each program (based on WSJ) of $175b, $70b, and $140b respectively. You can then calculate how much it costs (in lost revenue or greater expenditures) to create a job. The numbers are sobering: $233k per job for the payroll tax cuts and $350k per job for the infrastructure spending. And these jobs would only be around for the duration of the new stimulus package!
I am afraid that it is a political reality that we must have jobs programs (the median voter votes for them) so we must find a cheaper way for Government to encourage job creation. I say we try to get the politicians, to replace the minimum wage with a wage subsidy and see of that works. We are already paying many of the unemployed.
I am afraid that it is a political reality that we must have jobs programs (the median voter votes for them) so we must find a cheaper way for Government to encourage job creation. I say we try to get the politicians, to replace the minimum wage with a wage subsidy and see of that works. We are already paying many of the unemployed.
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