Wednesday, May 27, 2009

Spending Wads to "Save a Job"

As the economy sheds more jobs, Obama's touting 150,000 new jobs that have been "saved or created". In other words, it's not as awful as it would have been. How do you measure a "Saved" job anyway? This only cost you $800 billion. Dividing 800B by 150K means the government spent over $5.3 million dollars for each job "saved" or created. This line of reasoning is much needed comedy relief.

Obama touts a decline in utility bills at Nellis AFB. Certainly, cost reduction through the application of new technology is a good thing. Over time, it can create new jobs by diverting workers into more efficient activities. However, I have done Return on Investment analysis for technology investments. The benefits are never realized quickly since the phase-in requires a substantial investment cost. Typically benefits from a technology investment accrue over time in later years as ongoing costs are decreased relative to what they would have been with manual labor or old technology. For Obama to argue that porkulus has created new jobs ignores the fact that he made a ridiculously large "investment", via porkulus, to do it - if we assume that claim is even true, which I seriously doubt. This claim is an assault on common sense.

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