Obama Jobs Deficit Hits 8.3 Million, Another No-Jobs Bill Pending in Congress
Author: J.D. Foster
President Obama announced a renewed focus on jobs in his State of the Union address. His budget stated (PDF) “it is critical that we take steps to jump-start job creation”. He’s right, of course. He is also explicitly admitted the failure of last year’s $862 billion “jump-start” stimulus program. On March 4, the House passed yet another admission of failure as it moved a $17.6 billion mini jobs bill built around an ineffective hiring tax credit and highway spending. Why another bill? Because even politicians cannot duck the data forever, such as today’s jobs report released by the Labor Department which means the Obama jobs deficit stands at 8.3 million workers.
According to the latest report (PDF), the U.S. economy shed another 36,000 jobs in February. The unemployment rate stands at 9.7 percent, almost double the rate thought consistent with full employment. Further, the only reason the unemployment rate isn’t higher still is that millions of Americans have left the workforce altogether as shown by a drop in the labor force participation rate to 64.8 percent from a peak in 2007 of 66.4 percent.
The economy’s continued poor performance means President Obama is falling further and further behind on his promise to create millions of new jobs. Obama promised that if elected he would create 3.5 million jobs by the end of 2010 through new economic policies, beginning with the enactment of a massive economic stimulus package. Accompanying his jobs promise, the President also emphasized accountability and measuring his presidency by results. The result of the President’s jobs promise means total employment which in February stood at 129.5 million should be at least 137.8 million by the end of 2010, leaving the Obama jobs deficit at almost 8.3 million jobs.
Fortunately, the economy’s natural resilience spurred by powerful monetary stimulus from the Federal Reserve means the economy is growing again, albeit at a slow trend pace. Consequently, job losses may persist for months to come. Even the Administration’s rosy forecast for economic growth for the next two years leaves the unemployment rate around 10 percent through all of 2010 well into 2011. By his own official forecast and by his own standard, the Obama jobs deficit attests that his policies have failed and will continue to fail.
The federal government can stimulate the economy in the short term not by increased spending and borrowing but rather by improving incentives and the general economic environment. Businesses invest not when they are manipulated by Washington, but when they are confident enough to take risks in pursuit of opportunity. Individuals and businesses across the nation see tremendous opportunities for starting new businesses, investment, hiring new workers, expanding into new markets. Understandably, many are holding back due to concerns about the economy. However, many others are holding back due to concerns about the threatening policies from Washington while others are holding back because existing tax and regulatory burdens are already excessive. For private sector job creation to “jumpstart” in the President’s words, the first step is to fire Washington’s job destruction machine. The President and his allies need not repudiate their ideology, as helpful as that would be, but they do need to hit the pause button on their anti-growth policies.
There are a lot of ways to measure job growth in America, some more accurate than others. Organizing for America (the political arm of the Democratic National Committee) created a chart to “celebrate” the first anniversary of President Barack Obama’s Failed Stimulus. Their chart attempted to cover up the fact that President Obama’s stimulus was a giant failure and came up 9 million jobs short of the number of jobs he promised to create by 2010.
Well, Matthias Shapiro of 10000Pennies video fame created his own jobs graph showing just how great Speaker Nancy Pelosi’s (D-CA) economic stewardship has been for the American people. It shows how jobs have plummetted under her leadership:
There are a couple of things we at Heritage would have done differently if we had created the above graphic (for example, Matthias uses the Labor Department’s Table A-1 seasonally adjusted total employed number for his benchmark, while Heritage uses the Table B-1 seasonally adjusted total nonfarm payroll number for our benchmark), but it still does a great job countering the Organizing for America graph below:
When holding the Obama administration accountable for their $862 billion stimulus, the key is to remember what the White House promised to deliver when they were selling the plan to the American people, and then compare that to what the objective results have been.
When the Obama administration first unveiled their stimulus plan in November 2008, they claimed it would create 2.5 million jobs by the end of 2010. At the time, BLS reported that the U.S. economy had about 136.1 million jobs. But by January 2009, that number fell to 134.6 million jobs. Not so coincidentally, the Obama administration upped the job-creating magic of the stimulus to 4 million jobs by the end of 2010. Putting these numbers together, we can create an objective standard to judge both the President and his stimulus by: 136.1 million plus 2.5 million equals 138.6 million, and 134.6 million plus 4 million equals 138.6 million. So the objective, Obama-administration-created, BLS-data-verifiable, jobs-accountability number is 138.6 million.
According to the most recent BLS jobs report, the U.S. economy currently employs 129.5 million people, thus leaving President Obama’s failed stimulus 9 million jobs short of what was promised to the American people. This is the true picture of his stimulus:
