Fed's stimulus is costly flop

The Democrat stimulus is a massive, bank-busting flop. Those who foisted this 12-figure folly on Americans should suffer at the polls.

President Obama signed the Recovery Act in February 2009. Budgeted at $787 billion, it rose to $814 billion — a 3.4 percent cost overrun. Absent the stimulus, the White House assured taxpayers, the then-7.6 percent unemployment rate affecting 11.6 million Americans would climb to 8 percent.

Joblessness surpassed 8 percent anyway, shooting to 10.1 percent in October 2009 before settling at 9.6 percent, where it seems stuck today, frustrating 14.8 million job seekers. Unemployment has equaled or exceeded 9.5 percent for 14 months, the longest such stretch since the Great Depression.

In a forthcoming study, the Congressional Joint Economic Committee's GOP staff discovered that total non-farm payroll employment fell in 17 of America's 20 largest metropolitan areas between March 2009 and August 2010. Such jobs only grew in Baltimore, Boston, and — naturally — Washington, D.C. Even worse, in these 20 urban areas, "For every federal government payroll job created (+42,700), 13 private-sector payroll jobs (-556,900) have been lost." Corresponding state and local governments also shed 522,800 jobs.

Positions "created or saved" by the stimulus have cost taxpayers dearly.

In late September, the White House released "100 Recovery Act Projects That Are Changing America." This 28-page paper details infrastructure, clean-energy, social service, and other initiatives that "invest in a strong foundation for a 21st century economy." These ventures, the White House explains, mirror others across the country. "The projects in this report represent just a small fraction of the tens of thousands of projects the Recovery Act is supporting."

While analyzing these 100 programs, I gave the Obama Administration the benefit of the doubt and simply accepted the claims its paper presented. When the White House said Project 4's $24.8 million in stimulus money would help GE's energy-efficient appliance factory in Louisville, Ky. create 800 jobs through 2013, I counted all 800 posts today. When Smith Electric got $32 million for 220 direct and indirect jobs in Kansas City, Missouri (Project 66), I tallied them as direct jobs. Likewise, NV Energy's $137.9 million to create 400 to 500 temporary jobs in Las Vegas (Project 84) counted as 500 full-time slots.

Each position cost taxpayers an average $253,764.

So, Democrats are fighting unemployment by launching jobs at more than a quarter-million dollars apiece. And if the White House's upbeat assumptions that I accepted are wrong, per-job costs zoom.

Compare this lavishness to the Labor Department's $27.64 hourly Employer Cost for Employee Compensation. Paying one new staffer for 52 forty-hour weeks would cost an employer $57,491. Hence, private industry could create at least 4.4 jobs for the price of just one stimulus position.

Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford. University. E-mail him at deroy.Murdock@gmail.com