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

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  •  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 ]

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