Stimulus Is Over Sold

The Obama administration is still having difficulty in justifying the massive expenditure that came with the stimulus package. The root of the problem comes with claiming stimulus success is the state of unemployment. The administration prior to passing the stimulus said that it would prevent unemployment for rising above 8.5%, but now that number is close to 10%. While there has been some good economic news, it has been a mixed bag with lack of job creation clearly being a major problem.

Yet the administration continues to claim success with the stimulus. Vice President Biden’s likely making the most amusing sales pitch when he said, “In my wildest dreams, I never thought it would work this well,” and to paraphrase a TV pundit, ‘Who knew Joe Biden’s wildest dreams included a stimulus plan.’  Now the problem of such a hard sell isn’t just that unemployment numbers remain high, but there are accounting problems with the ‘jobs created or saved’ numbers. The AP writes in their article STIMULUS WATCH: Stimulus jobs overstated reports that, as the title suggests, the job numbers reported are higher than the actual number of jobs saved or created. Considering the administration’s claims about keeping unemployment down prior to the passage of the stimulus, and where unemployment numbers are currently at, the administration is finding itself in the middle of a logic gap where claiming success for saving and creating jobs just doesn’t add up.

The AP reviewed a sample of federal contracts, not all 9,000 reported to date, and discovered errors in one in six jobs credited to the $787 billion stimulus program — or 5,000 of the 30,000 jobs claimed so far.

Even in its limited review, the AP found job counts that were more than 10 times as high as the actual number of paid positions; jobs credited to the stimulus program that were counted two and sometimes more than four times; and other jobs that were credited to stimulus spending when none was produced.

For example:

_ Some recipients of stimulus money used the cash to give existing employees pay raises, but each reported saving dozens of jobs with the money, including one Florida day care that claimed 129 jobs saved.

_ A Texas contractor whose business kept 22 employees to handle stimulus contracts saw its job count inflated to 88 because the same workers were counted four times.

_ The water department in Palm Beach County, Fla., hired 57 meter readers, customer service representatives and other positions to handle two water projects. But their total job count was incorrectly doubled to 114.

STIMULUS WATCH: Stimulus jobs overstated

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