Bang for the Buck in the American Jobs Act
Posted: Wed Sep 28, 2011 2:58 pmBang for the Buck in the American Jobs Act
Posted by Brian Deese on September 27, 2011 at 9:05 PM EDT
Recently, a somewhat misleading estimate of the cost of the nearly 2 million jobs that independent economists estimate will be created by American Jobs Act has been making headlines, so we’d like to set the record straight. These calculations purport to show the “cost per job” created by the bill, by simply dividing the cost of the bill by the estimated jobs created next year. While this calculation might seem intuitive, it provides a misleading picture of the American Jobs Act and its economic impact.
First, as Secretary Geithner highlighted in a visit to a UPS facility in Louisville, Kentucky on Monday, in addition to supporting good middle-class jobs, the investments in the American Jobs Act also create real economic value. It helps pay for the cost of materials for rebuilding roads and bridges or modernizing schools. It provides tax cuts that go towards new investment by small businesses or new purchases by families. We can all agree that improving the quality of our schools and our infrastructure or providing small businesses with the incentives and resources to expand strengthens our economy and its competitiveness. Simply dividing the cost of the bill by an estimate of the number of jobs created ignores these economic benefits. In addition, these calculations focus on the jobs impact in one year alone, and evaluate it against the cost of the entire bill. While the package is designed so that there is the strongest boost in 2012, there is a job creation impact beyond then, which these calculations don't take into account.
http://www.whitehouse.gov/blog/2011/09/ ... n-jobs-act
Posted by Brian Deese on September 27, 2011 at 9:05 PM EDT
Recently, a somewhat misleading estimate of the cost of the nearly 2 million jobs that independent economists estimate will be created by American Jobs Act has been making headlines, so we’d like to set the record straight. These calculations purport to show the “cost per job” created by the bill, by simply dividing the cost of the bill by the estimated jobs created next year. While this calculation might seem intuitive, it provides a misleading picture of the American Jobs Act and its economic impact.
First, as Secretary Geithner highlighted in a visit to a UPS facility in Louisville, Kentucky on Monday, in addition to supporting good middle-class jobs, the investments in the American Jobs Act also create real economic value. It helps pay for the cost of materials for rebuilding roads and bridges or modernizing schools. It provides tax cuts that go towards new investment by small businesses or new purchases by families. We can all agree that improving the quality of our schools and our infrastructure or providing small businesses with the incentives and resources to expand strengthens our economy and its competitiveness. Simply dividing the cost of the bill by an estimate of the number of jobs created ignores these economic benefits. In addition, these calculations focus on the jobs impact in one year alone, and evaluate it against the cost of the entire bill. While the package is designed so that there is the strongest boost in 2012, there is a job creation impact beyond then, which these calculations don't take into account.
http://www.whitehouse.gov/blog/2011/09/ ... n-jobs-act