Professor Jacobson takes issue with the predictive model CBO uses to claim the stimulus lalapalooza "may have saved" 3.3 million jobs,comparing it to the Publisher's Clearing House ads telling viewers they "may have" won millions.
[T]he CBO is damaging itself some more with wildly speculative estimates as to how many jobs, and how much economic growth, have been created by the Stimulus Plan. This headline at The Washington Post about the latest CBO report say it all: CBO says stimulus may have added 3.3 million jobs. Notice the "may have" language. That is because the CBO is not calculating actual jobs created. Rather, it simply uses economic models which purport to predict how many jobs are created, and how much economic growth is generated, for each dollar of government spending.
Hence, the CBO gives extremely wide ranges to its estimates of how the economy was affected by the Stimulus Plan:
- "Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent"
- "Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points"
- "Increased the number of people employed by between 1.4 million and 3.3 million,"
- "Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 4.8 million compared with what those amounts would have been otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.)"
These are not real numbers, but you would not know it from the headlines.
The CBO does not even attempt, in its full report, to compare how the economy would have performed in the absence of the Stimulus Plan:
Although CBO has examined data on output and employment during the period since ARRA's enactment, those data are not as helpful in determining ARRA's economic effects as might be supposed because isolating the effects would require knowing what path the economy would have taken in the absence of the law.
Is it possible the CBO is using AGW modeling techniques -- like the Mann hockey stick?