USA Today threw some really foul-smelling garbage at President Obama's stimulus plan in a front page article today. The article implies that President Obama's team had just made up its claims that the stimulus would create 3.5 million jobs. For example, it includes the assertion by Representative Paul Broun that: "Very probably, these numbers are just picked out of the clear blue sky and are not authenticated or authenticatable." While the article does present a reply from Christina Romer, President Obama's chief economist, the article leaves the reader with the impression that this is a question that is up for debate. It isn't. President Obama's economic team produced a careful paper that explained exactly how they derived their job creation estimates. While it is possible to take issue with any of the assumptions that were used in this paper, they are all well within the mainstream of economics. It is simply not true to claim that the job creation figure was "picked out of the sky." The article also implies that there is something disingenuous about referred to jobs "created or saved." It quotes University of Chicago economics professor Steven Davis describing this as "a very clever device for providing future political cover." In fact, it is the only honest way to discuss the stimulus. Obviously the economy is losing jobs at a very rapid pace. The stimulus is being put in place with this as a backdrop. There is no guarantee that even a very effective stimulus will cause the economy to create jobs if it is shedding jobs at a very rapid pace in the absence of stimulus. By analogy, suppose a car is headed toward a brick wall at 120 miles an hour. If the driver slams on the brakes, but the car still hits the wall at a speed of 15 miles an hour, then obviously the brakes had an enormous impact in slowing the car and reducing the impact of the crash. However, in Professor Davis' world the conclusion would be that the brakes did not work.
--Dean Baker
