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Obama stimulus spending: $246,436 per new job [Updated]

A Shovel

Here's a new, mind-blasting economic statistic about the $787-billion economic stimulus package assembled by Democratic Rep. Nancy Pelosi of California and Sen. Harry Reid of Nevada for President Obama and the longtime, now-former senator from Delaware.

So far, thanks to this stimulus plan, national unemployment has climbed from about 8% to 10%. Vice President Biden often recounts the awful economic mess the Democrats inherited from the party of Lincoln and the brush cutter from Texas.

And Biden says, with considerable candor and a fair amount of understatement, that much work remains to be done to restart the economy. He's now reduced to hailing as progress the fact that 1 out of 10 U.S. workers is unemployed.

According to its own shovel-ready recovery numbers, the nearly 11-month-old Democratic administration claims to have created 640,329 good ol' American jobs so far this year by spending $157.8 billion of that stimulus money.

Now, that works out to a cost of $246,436 per job created, according to figures dug up by the eagle-eyed James Pethokoukis over at Reuters.

Total compensation earned by the average American payroll employee during the month of October was $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 to unemployed individuals $60,000 as a year's salary, they could have paid for 2.6 million jobs -- four times as many jobs that have been created. That's the kind of disastrous return on investment that could cost a banker his bonus.

On the other hand, simply handing out money 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.

[Corrected at 11:55 a.m.: An earlier version of this post said that Nancy Pelosi is a senator. She is speaker of the House of Representatives.]

-- Andrew Malcolm

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Photo credit: Associated Press

Comments () | Archives (13)

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Might as well use $157.8b to set up factories across the country to manufacture alternate energy devices. That will create more jobs.

Nancy Pelosi isn't a senator, she's a congresswoman. Point well made though.

Why would the LA Times employ someone to write on economics and politics who is so woefully ignorant as to be incapable of grasping the difference between jobs directly created by the stimulus money and jobs that are indirectly created by it? The stimulus bill was not a fancy form of unemployment insurance. It's not giving people money just for the sake of putting money in their pockets. It is paying people to do real jobs--many of them vital to the nation's infrastructure. Now, if I pay 10 people $50,000 per annum to work on fixing a highway, there's not going to be much point in paying any of that money if I don't also spend very large sums of money on buying concrete, rebar, asphalt etc. etc., and hiring trucks, compressors, cranes etc. etc. etc. Is Andrew Malcolm genuinely so cretinously stupid that he is incapable of seeing the stimulative effect that these purchases of equipment and materiel have on other jobs than those directly created by the stimulus contracts? Can he genuinely not see the value in supporting the nation's steel industry by the purchase of rebar, or the nation's heavy-machinery industry by the purchase and lease of Caterpillar tractors (to take just one example)?

Andrew Malcolm is either stupid or dishonest; in either case he should no longer be employed by the LA Times.

Do you really work for the LAT? This is almost heresy, isn't it, reporting some truth about Obama's program? Wow.

Gotta go now and check the sky to see if there are any pigs flying.

Progressive hopenchange: When the money you spend to "create" a job is 5 times more than the median household income. Obama wants to do this again.

People who disagree with me are stupid. Ad hominem attacks are the only way to influence people to my way of thinking. I'm only tolerant to people who think exactly the way I do.

I'm a pleasure to have at dinner parties because I make a point of belittling those around me.

Fire everyone who isn't Joel Stein!!

Hey California & L.A Times readers - for a state that has an economy that is worse off than North Korea's, maybe you should spend more time yapping at the idiot you voted in.
Your tax base is moving to Arizona and anywhere else, your vaunted movie industry films anywhere it can so long as it's not California and while I used to worry about Mexification of your state, giving it back to Mexico is making more sense. You reap what you sow.

Your trade unions have ruined business and your teacher unions ruined your public shools. Do you remember when everybody wanted to move to California? Orange tree's, sunshine, Pacific Coast Highway, opportunity and the American Dream and a Hollywood that didn't hate America. Heck you produced the greatest President (Reagan)since Lincoln. And now look at you fat and stupid and run by a bunch of gutless marxists that spend every waking moment trying to ruin the state by enslaving minorities so they can win elections - your pathetic. New Yorkers love you because you replaced them as the most hated. Well it was fun knowing you when you were young but your done now. Your elected leaders and the morons in Hollywood have injected enough poison into the state that all that is left is the autopsy. But hey you still have Pelosi criss crossing the country in her 747 filled with herself and a dozen others making sure those "green jobs" will be manufactured in California.

Exit question, why would a manufacturing company that makes "green" things open up in California, when they can open it in Mexico? Unless the plan was turn California into Mexico - job well done. Always remember that Hollywood sign is movable, and those movie stars and Streisand will be long gone when Los Angeles is renamed Northern Tijuana.

A communist is somebody who reads Marx. An anti-Communist who understands Marx. - Ronald Reagan

mmm mmm mmm Barack Insane Obama mmm mmm mmm


Pointing out that someone made a stupid comment is not an "ad hominem" attack. This is a talking point that only someone who understands nothing whatsoever about economics would adopt. Either Mr. Malcolm thinks he has made a telling critique of the stimulus policy: in which case he is so woefully ignorant that he is an embarrassment to this newspaper or he knows that he's saying something fundamentally misleading and does so because he wants to make a political point: in which case he should send that application in to Fox News.

If the stimulus money was spent on nothing but salaries (which seems to be what Mr. Malcolm is advocating) then almost none of the stimulus-funded projects could actually proceed. Do you want to try building a new building when you must spend all your money on construction workers' salaries, but aren't allowed to spend a penny on concrete, rebar, cranes, compressors, ducts, lighting, HVAC, plumbing supplies etc. etc. etc.? What proportion of a typical construction project do you think salaries usually comprises?

Is Mr. Malcolm arguing that money spent on everything but salaries is "wasted"? Does he really think that orders for all this materiel is exactly equivalent to throwing the money into the sea? Does he think that not a single US job will be created or maintained by increasing the demand for steel, for concrete, for all the things listed above? If so, he's a fool. If not, he's deliberately misleading his readers.

This article is a disgrace to the writer and to the LA Times.

Malcolm is unabashedly on the right. I know we've given up even the pretense of a unbiased media, but can't the LA Times get someone on the left to balance out this gasbag?

WOW, how about them critical thinking skills.

I am not going to say that all of the money is being spent on the most worthwhile projects, but saying the stimulus spent $246,436 per job created is completely disingenuous way of representing and reporting the money so far spent.

You are honestly insinuating with that claim that 100% of this money went to labor costs and 0% went to construction materials and machinery needed to facilitate the projects?

This is "Change" for the worse!
Bring back W!!!!!!!

England will not win the World Cup
So the 2010 World Cup draw has been made – so some sports betting sites, bookies and so-called 'experts' listed on have made England second favorites to win the cup in South Africa. But these betting sites are wrong this time. Wayne Rooney can't even stay awake to watch the draw! David Beckham is more like a model than a footballer nowadays, Lampard is garbage and Steven Gerrard is a thug. How can these compete with the likes of Ronaldo, Messi and co? England won the cup in 1966 and will not win again until football 'comes home'. My prediction is England will get the quarter-finals then get beaten by penalties or a dodgy red card (as usual).


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About the Columnist
A veteran foreign and national correspondent, Andrew Malcolm has served on the L.A. Times Editorial Board and was a Pulitzer finalist in 2004. He is the author of 10 nonfiction books and father of four. Read more.
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