Boston Real Estate Blog : Blog Archive : Stimulus success? Jobs ...

by John Ford

The state isn’t getting much bang for its federal stimulus buck.

Gov. Deval Patrick announced yesterday that the $1.9 billion in American Recovery and Reinvestment Act money he’s spent so far has “created or retained” 23,533 jobs.

That’s $80,737 per job over just seven months.

My thoughts: Perhaps I was too tough on the homebuyer tax credit. Compared to … never mind.

Source: Boston Herald .

On a related issue:

Edmunds: Cash for Clunkers cost taxpayers $24k per car, not $4k

There is little doubt that Cash for Clunkers gave auto sales a big boost in late July and most of August, but there has been considerable debate as to how much help taxpayers’ $3 billion provided. Customers who purchased a new car or truck were rewarded in many ways, especially when you consider the U.S. government paid out a median price of about $4,000 per clunker. Those customers are also saving at the pump, as each car turned in was 4-10 mpg better than the vehicle it replaced. Dealers sold more cars. States received more tax dollars. So the program was a success, right?

If you believe the statistical analysis of Edmunds, perhaps the program wasn’t so terrific after all. The industry research juggernaut claims that of the 690,000 vehicles sold under the program, only 125,000 of those sales went to people who weren’t going to purchase a new car in 2009. The result, says Edmunds, is that the $3 billion spent for C4C ended up spurring only 125,000 sales at a cost of $24,000 per vehicle. Further, Edmunds claims that October’s sales would have ramped up even more than what current projections indicate.

Now now — it’s not 80k/job: “Even if the $1.3 billion spent on direct benefits such as unemployment and Medicaid are taken out, that’s still more than $68,000 per job.”

So, not counting the health insurance and unemployment insurance, we’re spending $68k/job. That’s a lot, but it’s not THAT much. The Herald says they workers would like to have the money. I’m sure they would. But then we wouldn’t get the things we paid them to do - get addicts clean, feed the homeless, repair the roads, get crooks off the streets…

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