Stimulus?
August 12, 2010 by Rick Brock
Filed under Featured, News, Norann Dillon
One of my tasks this morning was to update an older blog post titled “Business Climate and Job Creation.” What I found has me very curious.
Here’s the original citation, which looked at February to September 2009:
“According to Recovery.gov, Minnesota has so far received $569,020,000 in ARRA (American Recovery and Reinvestment Act) funds in order to “create” 14,315 jobs. That’s a cost of $39,750 per job.”
Here’s what I found today (data updated 6/16/2010):
Minnesota has received $3.2 billion ($3,220,540, 336) for 11,414.77 “prime recipient reported jobs.”
Hmm.. more money and fewer jobs? It turns out that the money is reported cumulatively, but the jobs reported quarterly. Here are more details on how the jobs numbers are calculated:
“The initial guidance captured jobs for a period of time longer than a quarter (February through September). The new guidance captures jobs for a single quarter (e.g., October through December). In addition, the new guidance eliminates the distinction between a job created and a job retained. Jobs are now simply based on the number of hours worked in a quarter that were paid for by Recovery funds.
It does not matter if the hours were worked by a person who was newly hired, a person whose job was saved by the Recovery Act, or a person who is in an existing position that is now being funded by the Recovery Act. [emphasis mine]
In December 2009, the Office of Management and Budget (OMB) issued the changes in guidance to align with the recommendations of the Government Accountability Office. OMB believes the new formula will help improve the overall quality of recipient reporting.”
So what did that $3.2 billion do for Minnesota? 38,038 jobs or $84,666 per job.
In our district during the fourth quarter of 2009, 18.5 jobs were “saved” by $1,696,214 – $91,687 per job – mostly on a contract to provide emergency generators to the Army and Air Force.
Also in our district during Q4 2009, $573,664 was spent on landscaping along I-494. Sure, 2.31 people were put to work for a while and some nurseries benefited from the plant purchases. But this project is of no lasting value to the community since landscaping does nothing to increase the safety, productivity or efficiency of our infrastructure. I wonder about those 2.31 folks – what are they doing now to earn a living?
Spending money doesn’t create a job. Market demand creates a job – one that is sustainable and benefits the consumer and community.
Like I said in my original post, it is too easy to spend other people’s money. The problem is that we have no money to spend; we’re running a tab for our children and grandchildren.
We need to hold government accountable to receive the best return on our tax dollars – in the schools, on public safety and transportation. That takes some political courage to say we can’t spend money on feel-good projects at the expense of our needs or the next generation.
