Skip to main content

View Diary: Wall Street Journal - "Obama spending binge never happened" (118 comments)

Comment Preferences

  •  with 1 trillion I can create 20-25 million jobs (2+ / 0-)
    Recommended by:
    Sue B, sockpuppet

    Spent on stuff like infrastructure.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Tue May 22, 2012 at 08:29:21 PM PDT

    [ Parent ]

    •  Those numbers are quite a bit overstated (0+ / 0-)

      based on all empirical evidence, $1 trillion would create no more than 7 to 10 million jobs.

      Which clear would be a Good Thing (just not as spectacular as you suggest)

      •  All empirical ? Hardly Look at the 2009 stim: (1+ / 0-)
        Recommended by:
        Roadbed Guy

        Recovery Act had about 1.73 billion in stim - should have created between 3.46 and 4.3 million jobs, it created 4.2 million.
        http://en.wikipedia.org/...

        Infrastructure InvestmentTotal: $105.3 billion

        $10 billion for health research and construction of National Institutes of Health facilities
        $2 billion for Community Health Centers
        $1.3 billion for construction of military hospitals (military)
        $6 billion for renewable energy and electric transmission technologies loan guarantees
        $4 billion to the Department of Housing and Urban Development (HUD) for repairing and modernizing public housing, including increasing the energy efficiency of units.
        $53.6 billion in aid to local school districts to prevent layoffs and cutbacks, with flexibility to use the funds for school modernization and repair (State Fiscal Stabilization Fund)[

        4.25 million jobs created:
        http://www.barackobama.com/...

        Rule of thumb
        100 billion spent on infrastructure creates 2-2.5 million jobs. Other types of spending have a weaker multplier. Infrastructure has the strongest multiplier.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 23, 2012 at 10:42:13 AM PDT

        [ Parent ]

      •  More (1+ / 0-)
        Recommended by:
        Roadbed Guy

        1 billion creates 18 million

        Its a pdf, and my computer has balky.
        www.americanmanufacturing.net/files/peri_aam_finaljan16_new.pdf

        A $1.2 Trillion Infrastructure Plan Creates 27 Million Jobs In 5 Years

        http://www.forbes.com/...

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 23, 2012 at 10:49:14 AM PDT

        [ Parent ]

      •  The 53 billion spent on education (1+ / 0-)
        Recommended by:
        Roadbed Guy

        $53.6 billion in aid to local school districts to prevent layoffs and cutbacks,
        http://en.wikipedia.org/...

        Obama claims 1 million jobs saved, and according to the rule of thumb, 50 billion shoulda have saved 1 million education jobs.
        http://www.barackobama.com/...

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 23, 2012 at 11:43:47 AM PDT

        [ Parent ]

        •  I appreciate this (and your other) responses (0+ / 0-)

          however, I believe that in some or most of the cases, a small sample size has been extrapolated into a much larger sample size in an unsustainable manner.

          For example, I'll grant you that $100 billion in infrastructure could create 1.8 million jobs.

          But I would argue that the next $100 billion will create fewer due to factors such as a shortage of qualified workers, construction materials, etc.  Thus the cost will be bid upwards.

          And so on, until the last $100 billion of the $1 trillion chunk of money may only create a few tens of thousands of jobs.

          Thus $100 billion in infrastructure spending (which would then comprise about 6 or 7% of GDP) CANNOT be scaled 10x to create more jobs.

          Another way to look at this is that the USA has a $14 trillion economy (appr) with about 140 million jobs - based on that ratio, $1 trillion in infrastructure spending would result in about 10 million jobs.  But since they are typically better paying than the average job out there (at WalMart let's say), the number might be lower - let's say about 7 million.

          That's how I came up with the estimate I originally provided.

          To me, the only viable way that 2 or 3 times that many jobs could be provided for that amount of money would be to stick massive numbers of people out there with shovels (literally, like in the 1930s)  - for many reasons, I don't see that happening in today's America.

          •  Numbers, I'm confused (0+ / 0-)

            Thus $100 billion in infrastructure spending (which would then comprise about 6 or 7% of GDP)

            GDP is about 14.5% call it 15%, 5% of GDP would be 750 billion.

            Civilian workforce is about 159 million, less the 23 million represented by U6 would be about 136 million

            $1 trillion in infrastructure spending would result in about 10 million jobs.
            Ok, you are sticking with the lowest estimates. I've thrown out the high est of 47 million jobs per 100 bill

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Thu May 24, 2012 at 12:33:51 PM PDT

            [ Parent ]

            •  I'll try again (0+ / 0-)

              based on your statistics, infrastructure spending is currently about 1.7% of US gdp.

              According to the internet, US gdp is $14,586,736,313,339 link

              Which means that each job requires $107,255 in "gdp"

              or, $1 trillion in spending (of any type) would produce/support about 9.3 million jobs.  Assuming (and I think you're onboard with this concept, infrastructure spending would create secondary jobs that would more or less mirror the rest of the economy, making this a fair estimation)

              ++++++

              Being more infrastructure specific, 1.7% of gdp is about $247 billion (which, all things being equal, supports about 2.3 million jobs).  

              Like I mentioned before, there is definitely some slack in the system - but at the very most, it is hard to think that there is more than 50% unemployement/idle equipment in this sector of the economy.  Therefore it might be possible to throw in a quarter of trillion $$s and more or less double employment (e.g., from 2.3 million to 4.6 million) but it really boggles the mind to think one could throw in 4 times that much $$s (i.e., $1 trillion) and quintuple employment  (e.g., the original 2.3 million people plus the 4x times 2.3 million from the stimulus funding).  

              •  1.3% of GDP in 2011 (0+ / 0-)
                Assuming (and I think you're onboard with this concept, infrastructure spending would create secondary jobs that would more or less mirror the rest of the economy, making this a fair estimation)
                No. As a concept thats wrong. Infrastructure spending has the best multiplier of any spending. Other sectors suffer because a dollar spent in the US doesnt stay in the US as it did in 1936. A dollar spent on manufacturing may have a multiplier of 1.5-1.7, Infrastructure spending has a mulitplier of 1.7 to 2.2.

                Heres the conumdrun you've painted yourself into

                 create secondary jobs
                Ok, your low estimnate of 7-8 million jobs per trillionspent is reliant on not counting secondary jobs as per the BLS info I already posted. SO now you agree with the National Highway administration estimate of 27 million job per trillion?

                If one is to count secondary jobs, then one must assume the estimates that include seconady job creation are true, in the 20 to 25 million jobs per trillion spent.

                But I would argue that the next $100 billion will create fewer due to factors such as a shortage of qualified workers, construction materials, etc.  Thus the cost will be bid upwards.
                Wow. Shortages, eh? Got any "empirical data to support that claim?

                The Operating Enginners, a union, has traiing courses on how to operate equipment. SO if say we're going to spend 5% of GDP each year infrastructure for 10 years.... whats going to happen? Yeah, people get trained to match need.

                Shortages of what... Reinforcement steel for concrete work?

                Again, with the multi year commitment comes private capital to improve capacity in materials. Sand Grave,l concrete, reinforced steel. SO all these sectors will hire to meet demand... how can you discount demand, thats silly.

                it is hard to think that there is more than 50% unemployement/idle equipment in this sector of the economy.
                Sigh, thats nuts. a 10 yr infrastructure plan would just drive demand up for equipment. thats part of your problem, you keep assuming this is a static model, thats simply not true.

                What you are claiming goes against Keynesian macro economics. Its fine to have an opinion, but to not back it up makes sure it stays an opinion.

                Putting aside my many typos, the concensus of the info I posted suggest 10 million to 47 million jobs can be created per trillion. Your theories aside, I'll stick to 20 to 25 million per trillion spent.

                FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                by Roger Fox on Thu May 24, 2012 at 02:56:36 PM PDT

                [ Parent ]

                •  OK, I'm getting more and more confused (0+ / 0-)

                  is this $1 trillion over 10 years?

                  In that case, yes my supply and demand points would not be a factor, the country and the relevant economic sectors could (probably) easily accomodate that w/o runaway inflation.

                  BUT IN THIS CASE THE NUMBER OF JOBS WOULD HAVE TO BE FIGURED ON A PER YEAR BASIS - which would not be the number you mentioned, or you going with the "job-year" concept?  e.g., one person getting a job for ten years counts as 10 jobs?

                  Or, are you proposing $1 trillion per year over 10 years?

                  In that case, the resulting $10 trillion seems to significantly overshoot the needed $3 trillion or so in infrastructure repairs/upgrades this country needs.

                  IMHO that's a bit silly, why not spend the "extra" $7 trillion in something other than simple "make work" projects (education maybe, or possibly even biomedical research . . . .)

                  •  Original comment (0+ / 0-)

                    1 trillion creates 20 to 25 million jobs. SO yes, each year, obviously 1 year is not enough.

                    AS a final note,

                    based on all empirical evidence
                    Where is this empirical evidence? You've provided none. Ok.

                    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

                    by Roger Fox on Fri May 25, 2012 at 11:27:08 AM PDT

                    [ Parent ]

      •  CBO & San Fran Fed studies (1+ / 0-)
        Recommended by:
        Roadbed Guy

        What it says: Through the first quarter of 2011, the stimulus created between 1.6 million and 4.6 million jobs, increased real GDP by between 1.1 and 3.1 percent, and reduced unemployment by between 0.6 and 1.8 percentage points.

        http://www.cbo.gov/...

        What it says: The stimulus created 2 million jobs in its first year, and 3.2 million by March 2011. The jobs multiplier varies widely based on whether one studies stimulus spending that has been announced to go to certain recipients, is obligated to those recipients, or has actually been paid out to those recipients.

        http://www.frbsf.org/...

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 23, 2012 at 11:45:42 AM PDT

        [ Parent ]

      •  PolitiFact: (1+ / 0-)
        Recommended by:
        Roadbed Guy

        100 billion creates 2.7 million jobs

        http://www.politifact.com/...

        Cornell

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 23, 2012 at 11:57:36 AM PDT

        [ Parent ]

      •  The Lowest I found in a Cornell paper (1+ / 0-)
        Recommended by:
        Roadbed Guy

        Rendell and Smith say that Canada spends 4% of its GDP on infrastructure and the U.S. spends 1.7%.  That gap, 2.3% of GDP, is about $345 billion per year.  A quick look at construction job creation estimates from infrastructure spending (7,000-10,000 jobs per $1 billion of spending)
        http://voxrationalis.wordpress.com/...

        Is based on BLS numbers,
         

        The BLS employment requirements table shows 11,768 jobs directly and indirectly dependent
        upon $1 billion of spending on construction. A majority of the jobs are in the construction
        industry itself (i.e., 6,925 direct jobs).
        The figure from the BLS employment requirements table for construction expenditures (11,768)
        is somewhat lower than the direct and indirect jobs figure for highway expenditures from the
        FHWA (13,860). Potential explanations for the disparity include differences in industry definition,
        data sources, method of updating the model, and time period.
        But the BLS numbers are not derived the same way as the  Federal Highway Administration, which in a 1997 study claimed 1 billion creates 47 million jobs, but was displaced by more recent work on the same subject:

        “then $1 billion in Federal funds supports 27,800 jobs."
        http://digitalcommons.ilr.cornell.edu/...

        The basic difference netween the BLS numbers and the Highway Adminstration seem to be thus

        FHA counts:
        • the number of jobs directly attributable to the activity,
        • the number of jobs indirectly attributable to the activity, and
        • the number of jobs induced throughout the economy as a result of the activity.

        While BLS only counts direct and indirect job creation. And thats how one can get 7-10 million jobs created by spending 100 billion.

        47 million jobs created by 100 billion in spending has been generally discounted.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed May 23, 2012 at 12:12:55 PM PDT

        [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site