Just Hand Out Fistfuls Of Cash
Andrew Malcolm blogs at the LAT, based on a piece by James Pethokoukis over at Reuters, that each new job the stimulus spending paid for cost $246,436:
Total compensation earned by the average American payroll employee during the month of October would be $59,867 on an annualized basis, Pethokoukis reports. That's only 24% of the nearly quarter-million-dollars it costs the federal government to create that spot.Had Obama and Biden simply handed out 60-grand as a year's salary, they could have paid for 2.6 million jobs, four times as many as they've actually created. That's the kind of disastrous return on investment that could cost a banker his bonus.
On the other hand, simply handing out the dough to nearly 3 million people would have drastically curtailed the nation's 2009 production of ribbon-cutting photo ops in congressional districts across the land.
It's not the decreased opportunity for photo ops that discourages Congress from pursuing effective economic stimulus policies, it's the decreased opportunity for corruption.
Pseudonym at December 8, 2009 7:46 AM
People don't realize that any government project has at least 70% of the money wasted on bureaucracy before it gets to it's intended target.
David M. at December 8, 2009 8:08 AM
"That's the kind of disastrous return on investment that could cost a banker his bonus."
I don't think there's anything that can actually cost a banker his bonus.
Kate Hutchinson at December 8, 2009 12:05 PM
Except, presumably, the jobs will last for more than a year. Hopefully.
NicoleK at December 8, 2009 4:40 PM
The Australian govt did simply hand out money to individuals. Every taxpayer received at least one payment of $900. Many received much more.
The aim of the exercise was clearly to prop up the retail sector. They genuinely did want people to spend it on wide screen TVs and video games. Possibly because it wasn't a huge amount it seems the majority did just that.
I live in a town with large and busy building and retail industries. We were expecting to be really hammered by the downturn but apart from about a month earlier in the year - almost certainly fear induced - it's still as active as ever. Incomes among my tax clients are consistently higher.
To my surprise - and the long term may change this evaluation - it seems our government may have got this one right.
gwallan at December 8, 2009 5:05 PM
That's the kind of disastrous return on investment that could cost a banker his bonus.
Only if the banker is really low level.
The former Banker at December 8, 2009 6:04 PM
gwallan-
Where are you located? Unless it is in an area that is government\defense\medical related, I am perplexed. I have clients all across America and Canada, and I would guestimate the 90% are more worried and worse off today than they were a year ago.
Are you in Australia?
Eric at December 8, 2009 9:29 PM
@Eric...
I'm Australian.
And as I said I'm surprised at the patterns I'm seeing. It may only be the region I'm in - which is central Victoria - but that would be inconsistent with similar past events. Long term judgement still very much reserved however.
Those who do seem to be doing it hardest are self funded retirees who have seen their investment returns drop. I haven't done an actual analysis yet but I'd estimate worker incomes among our client base were consistently four to five percent higher in our 2009 tax year.
The next one may tell a tale. Unemployment IS up.
gwallan at December 9, 2009 2:05 PM
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